Could Airbus Buy SR Technics?

In summer 2020, the Swiss maintenance provider introduced remote table inspections using video streaming portal for any engine type or shop visit.

A sale of SR Technics by China’s embattled HNA Group has been on the cards for much of this year, but in an interesting new development Bloomberg has reported that Airbus is among the potential bidders for the MRO provider.

While the European OEM has not commented on the story, if true it would mark a rare foray into direct ownership of an MRO provider by an aircraft OEM – not to mention a concrete demonstration of one’s efforts to boost aftermarket revenue.

Airbus’s services revenue reached €2.5 billion ($2.8 billion) in the first nine months of this year, 17% higher than in the year-ago period.

Rival manufacturer Boeing reported almost $4.7 billion of services revenue for the third quarter alone, although this included a hefty chunk of military work.

At Airbus, services’ share of total commercial revenues in the nine months to 30 September was stable at 7%.

HNA acquired an 80% stake in SR Technics in 2016 at the zenith of a multi-sector buying spree that has since unraveled, forcing it to sell assets and even threatening the finances of its core Hainan Airlines operation.

Last week eight Chinese banks extended a $568 million loan to Hainan Airlines, although certain analysts have suggested that this is insufficient to shore up its finances, let alone those of its other airline affiliates, which are in even worse financial straits.

To that end, a sale of SR Technics which could fetch up to $1 billion would provide some much-needed liquidity.

Other potential bidders reportedly include the Hainan government and rival MRO providers.

Of course, no sale might also happen; as with most dealings of HNA, whose companies are owned an traded via a labyrinthine network of affiliates, subsidiaries, endowments and cross-shareholdings, the future of SR Technics within the group remains opaque.