China Airlines Ltd (CAL, 中華航空) yesterday inked a memorandum of understanding with Airbus Group SE, as the nation’s biggest carrier prepares to venture into the aviation maintenance, repair and overhaul market.
Under the terms of the agreement, Airbus is to bolster CAL’s technical capacity in servicing the A350 XWB, A320 and A330/A340 families of aircraft as well as develop new business solutions.
The two companies have set their sights on evaluating the feasibility of extending the aircraft retrofitting and cabin and frame modification businesses to Taiwan, CAL said.
Airbus is also to provide support for CAL’s engineering and technical training capabilities in Taiwan and to obtain the required certifications, the carrier said.
The companies said that they are also evaluating the benefits of having Satair Group and other Airbus affiliates become key parts suppliers for CAL.
“As there are not many other carriers that have added the Airbus A350 in Asia, we aim to be among the first movers in opportunities related to the new aircraft,” CAL chairman Ho Nuan-hsuan (何煖軒) told reporters at a news conference in Taoyuan.
Given the location and ongoing development of the Taoyuan Aerotropolis Project, Taiwan is well-positioned to become a major aircraft servicing hub, and tap a global market that is estimated to expand to US$86.9 billion this year from 2014’s US$57.7 billion, Ho said, citing industry studies.
Asia is expected to see the strongest growth momentum, he added.
Carriers must diversify into other areas to cope with rising competition and low airfare margins of between 3 and 5 percent, Ho said.
“The success of EVA Airways Corp’s (長榮航空) aircraft maintenance partnership with Boeing Co is a prime example of what might be achieved by its Taiwanese peers,” Ho said.
CAL yesterday also held a groundbreaking ceremony for a new facility that is to be operated by Taiwan Aircraft Maintenance and Engineering Co Ltd (台灣飛機維修), its fully-owned subsidiary that was established in January last year.
Set to be completed in March next year, the facility is designed to hold as many as five Airbus jetliners for servicing.
In related news, TransAsia Airways Corp (復興航空) said that its fleet of 11 aircraft would be sold at auction next month, with delivery scheduled to take place in March or April as the company carries out plans to dissolve its business.
TransAsia said that it has observed all regulatory requirements in its dissolution and would pay NT$10,000 bonus to each of its 1,735 employees, in addition to the NT$600 million fund it plans to distribute among them for severance compensation, pending approval from its shareholders.
The company denied it had made contact with FAT Taiwan Inc (遠東航空) regarding buyout and restructuring plans.
However, the improved compensation offer failed to end disputes with the company’s workers’ union, with some members yesterday storming into the Ministry of Labor compound to express their anger.