Aftermarket JVs stay strong in China

The coronavirus outbreak and trade tensions with the U.S. may mean that China has sunk down the list of attractive business destinations for the time being, but Western MRO companies remain committed to a country where many have already accumulated substantial experience.

Almost all of that has been through joint ventures (JV), often with one of the three big Chinese airlines. Example include AMECO Beijing, Lufthansa Technik’s joint venture with Air China; MTU Zhuhai, a partnership with China Southern; and SSAMC, CFM’s engine overhaul JV with Air China.

“We are very fortunate to have a great joint venture partner in China Southern,” Jaap Beijer, president and CEO of MTU Maintenance Zhuhai, tells Inside MRO. “In fact, at the end of 2018, we agreed to extend our joint venture agreement by a further 20 years to 2051.”

Beijer says that despite the Chinese New Year holiday being extended in MTU Zhuhai’s home province to cope with coronavirus outbreak, the facility is now “back operating at full capacity”.

Trade tensions also don’t seem to be much of a hindrance, with Beijer reporting zero impact on MTU Zhuhai operations and none expected in the future. “The aviation industry is crucial to both countries and we doubt that this market will be put in danger,” he says.

Even flagship U.S. companies don’t seem deterred, with Boeing announcing in late 2019 that it would open an additional Chinese freighter conversion line in partnership with GAMECO, which is itself a joint venture of China Southern.

To find out more about the benefits and complexities of Western-Chinese aftermarket partnerships, including reaction from the many of the main players to the coronavirus outbreak and to geopolitical developments, see the next issue of Inside MRO.

Alex Derber

Alex Derber, a UK-based aviation journalist, is editor of the Engine Yearbook and a contributor to Aviation Week and Inside MRO.