HAECO Heavy Maintenance Holds Up
Hong Kong Aircraft Engineering Company (HAECO) has reported “stable” base maintenance demand despite big drops in other parts of its business due to the Covid-19 pandemic.
The Swire Pacific-owned maintenance company posted a HK$342 million ($44 million) operating profit for the six months to June 30, 2021—HK$245 million less than the previous year with impairment charges stripped out.
HAECO’s heavy maintenance work is split between sites in its home base of Hong Kong, the U.S. and China, with only the Xiamen facility reporting fewer man hours sold in the first half.
HAECO Americas, in contrast, sold 4% more hours due to “a return of demand for base maintenance as domestic air travel in the USA recovered from COVID-19,” reported Swire Pacific.
The Americas operation also benefited from U.S. government assistance under the CARES Act, part of a HK$127 million contribution to attributable profit from government support schemes in the first half.
However, other maintenance services fared much worse, particularly those in Hong Kong: HAECO line maintenance movements were more than 25% lower than in the first half of 2020, while the number of engines overhauled fell 37% to 116.
Fewer engine overhauls and “lighter workscopes due to the effect of COVID-19 on aircraft usage” drove 76% and 57% profit declines at HAECO Engine Services Xiamen and HAESL, respectively, HAECO said.
HAECO expects demand for base maintenance in the second half of 2021 to remain stable in the U.S. and Hong Kong, and for it to increase in Xiamen.
The group hopes demand for engine service will increase gradually in Xiamen and remain stable at HAESL, as compared with the first half of the year.