Home' Asian Aviation : AAV Feb 2014 Contents 36 AsianAviation | FEBRUARY 2014
On the passenger-to-freighter (PTF) conversion
side of the business, as of mid-December 2013
there was a new order of 17 757s on the books,
with more expected. ST Aerospace has launched
an effort to develop a supplemental type certificate
(STC) to increase the pallet load from 14 to 15 -
the additional pallet will be particularly attractive to
lessors, Chang says.
Last year the company carried out two PTFs on
767s and expects to do a few more this year. "It's
something that's come back," says Chang, as the
residual values have come down.
The residual values for the A330 are still high as the
aircraft is still very much in demand. ST Aerospace
entered into a joint venture with Airbus to develop
PTF conversions at EADS EFW in Germany for the
A330 at the last Singapore Air Show in 2012.
A launch platform has now been selected - the
A330-300 (to complement the Airbus A300-200F).
"It's a long term programme. By 2017 we'll have an
STC in place. It's a good freighter," says Chang. The
residual value of the A330-300 will have come down
by then, he predicts, and expects to have a launch
customer in place.
EADS EFW has carried out more than 20 heavy
maintenance (HMV) visits. "I'm quite happy with
its progress. It starting to build a track record," says
Chang. EADS EFW has also carried out A380 wing
rib modifications, but Chang describes the A380 MRO
market as "niche", with so much of the global fleet
operated by Emirates, which has in-house capability.
NEW LEASE OF LIFE
Meanwhile, ST Aerospace has laid the groundwork
for its entry into the aircraft leasing business. In
November 2013, it signed a joint venture with Wings
Capital Partners Holdings to set up WingStar.
This is being run by ST Aerospace with Stephen
Hannahs (the recently retired founding chairman of
Aviation Capital Group) as chairman. WingStar will
be focussed on mid-life and end-of-life A320s and
737NGs. "This means we can manage rotables,
engine components, train the pilots, provide engines
and aircraft," says Chang. "We are looking for a
launch portfolio, and then we'll take it from there."
ST Aerospace already has an engine leasing joint
venture with Japan's Marubeni, and has recently
added the IAE V2500 to the portfolio, to supplement
the CFM56. "We're now able to support the A320
completely, with both types of engine," says Chang.
Total Engine Asset Management (TEAM) has about
ten engines at the moment. "The joint venture is
already profitable. We intend to continue to invest,"
Geographically, ST Aerospace has as wide a
foot print as anybody, but Chang is still looking for
opportunities. The Americas are, and have been, a
particular area of interest.
The company's US affiliate STA San Antonio has set
up a new division in Texas called Hondo Aerospace
that will focus on what Chang describes as "recycling"
- the harvesting of parts in an environmentally-friendly
manner. "We are in the process of getting accredited
as a green recycling centre," says Chang. "Our plan
is to move up the value chain."
The site at South Texas Regional Airport consists
of 379,692ft2 of space, comprising a narrow-body
hangar and surrounding ramp space. It will enable
the company to do its own part outs. "There are
a lot of benefits from harvesting the rotables that
come off aircraft," notes Chang. "We can also do
that for third parties. I would like to do that in a
responsible manner, make it more green. We can
use [the parts] to support our Maintenance-By-the-
Hour programmes. We can use them, exchange them
or lease them out."
ST Aerospace has experienced mixed fortunes in
the Americas in recent years -- its attempt to buy US
MRO provider PEMCO in 2012 fell through, and
more recently it has decided not to renew its lease
on its Panama facility after problems with the hangar
and acquiring skilled labour. Hong Kong-based
HAECO has recently acquired US-based TIMCO,
in a strategic move widely seen as a response to the
labour shortage situation in Hong Kong.
Chang is still interested in the Americas. "In the US
we have quite a good spread." Its US affiliate VT
Aerospace owns five aerospace operating companies
in Mobile, Alabama; San Antonio, Texas; Burlington,
Washington and Wethersfield, Connecticut.
Chang stresses that as well as the US, he is also
interested in Latin America - "because the cost
structure is better". But adds that "you need the right
formula", pointing to the Panama experience.
Another region that Chang has also been keeping
an eye on for quite a while is the Middle East. "We
do have some initiatives in the works," he says. ST
Aerospace is working with the Royal Air Force of
Oman on a C130 upgrade.
On the engines side of the business, the
company's facility in Xiamen, China, has handled
around 30 engine shop visits this year. Chang is
hoping to catch a wave of CFM56 engine shop visits
- when it finally arrives. This has been a retreating
target for a few years. "The CFM56 has turned out to
be more reliable than people thought. Conservatively
ST Aerospace's Engine Total Support (ETS) programme
"We do have a pedigree in supporting a
lot of these LCCs, which shows that our
cost structure is good and reasonably
CHANG CHEOW TECK
president, ST Aerospace
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