The commercial aerospace division of ST Engineering has entered into an agreement to set up a commercial airframe Maintenance, Repair and Overhaul (MRO) joint venture with SF Airlines, to be based in China’s Hubei province. ST Engineering has noted industry forecasts indicating that demand for MRO services in China and the Asia Pacific region to increase at a compound annual growth rate of about 3-7% over the next decade. The strategic collaboration with an established freighter airline is intended to allow ST Engineering to capture new opportunities in a high-growth region.
The joint venture, subject to regulatory approvals, will operate a greenfield airframe MRO facility at Ezhou Huahu Airport which is designated as Hubei’s international logistics hub airport. With passenger and air cargo traffic growing steadily as China re-opens its flight connectivity following Covid restrictions, the joint venture will not only support the MRO demands of SF Airlines, which operates 77 freighter aircraft, but also serve the increasing needs of other cargo and passenger airlines operating in the region.
ST Engineering will have a majority 60% stake in the joint venture, with the remaining 40% to be held by SF Airlines. The joint venture expects their first facility to be ready for business in 2025.
“This is an exciting development for us given that China and the Asia Pacific region are key markets for ST Engineering’s commercial aerospace business. With the strengthening of our commercial aerospace network in China, we will be able to better meet the growing needs of airlines in the region, providing them the capacity and flexibility that come with greater choice of locations,” said Jeffrey Lam, commercial aerospace president at ST Engineering. “Our MRO expertise and years of experience in China, combined with this strategic collaboration with SF Airlines which is also the anchor customer, will be strong factors contributing to the joint venture’s success.”
ST Engineering already has a network of facilities in Asia Pacific, the USA and Europe. In China, the company currently operates airframe MRO facilities at Guangzhou Baiyun International Airport and Shanghai Pudong International Airport, as well as an engine MRO facility in Xiamen.