Western airplane maintenance providers rush to sign Chinese contracts

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* Spirit, Honeywell, Boeing agree deal at Airshow China

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* China MRO market will be 8% bigger in 2021 than 2019 – Oliver Wyman

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* Service deals give manufacturers a foothold for decades

ZHUHAI, Sep 30 (Businesshala) – Western aircraft maintenance, repair and overhaul providers (MROs) signed new contracts with Chinese customers and joint venture partners at the country’s biggest air show this week to gain a foothold in the lucrative market .

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A rapid rebound in traffic to pre-COVID levels in China’s domestic aviation market, coupled with major declines in other parts of the world, has made China even more difficult for providers trying to cushion the revenue hit induced by the pandemic. made important.

Kailash Krishnaswamy, general manager of Spirit Aerosystems China, said on the sidelines of Airshow China in Zhuhai after signing a 10-year repair contract, “China is important to the future of aerospace as the center of gravity of passenger traffic is moving east. ” Cargo carrier SF Airlines. Atma was joining the show for the first time.

Consulting firm Oliver Wyman estimates that China’s MRO market will be 8% larger this year than 2019, making it one of two regions to surpass pre-pandemic levels, along with Eastern Europe. By 2031, it estimates that the MRO market in China will more than double its pre-COVID size to approximately $20 billion annually.

Honeywell International is a major supplier of China’s Commercial Aircraft Corp (COMAC) C919 narrowbody program and is bidding for work on the Sino-Russian CR929 widebody, said its China president, Steve Lien.

Deals like this give it a foundation for future when maintenance is required. Honeywell this week signed a provisional agreement with the aircraft’s first customer, China Eastern Airlines, to provide MRO services for its C919 auxiliary power units, and said it would sign up to other carriers as the COMAC ramps up production. hopes to do.

Like Spirit, it also sees strong potential in the cargo market, which is growing rapidly with the rise of e-commerce and typically uses older aircraft that require more maintenance than the latest generation jets .

“The forecast for cargo is very strong,” Lien said. “China’s cargo capacity is not as mature globally as the US and Europe. But making it mature is in the national interest.”

The Boeing Company and Guangzhou Aircraft Maintenance Engineering Company Limited (GAMECO) signed an agreement at the show next year to install two 767 freighter conversion lines.

Boeing said in a forecast last week that Chinese airlines would need 8,700 new airplanes worth $1.47 trillion by 2040.

At a time when China is focusing on producing domestic aircraft, Boeing China President Sherry Carbury said her company’s strength in services was the key to giving it a foothold in the market over the long term.

“It’s the services that really support that airplane over its life over the next 20, 30, 40 years,” Carbury said. “So it’s not a one-time sale. It’s a lifetime relationship that’s very important to us.” (Reporting by Stella Qiu and David Kirton in Zhuhai; Additional reporting and writing by Jamie Freed in Sydney. Editing by Gerry Doyle)

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