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Chinese cargo airline SF invests in airframe repair station

SF Airlines, China’s largest cargo airline by fleet size, has agreed to become a minority partner in a new joint venture airframe maintenance and upgrade company in China that will give its aircraft priority access for service and another revenue stream.

Singapore-based ST Engineering announced Thursday that it will set up the maintenance, repair and overhaul (MRO) facility at Ezhou Huahu Airport in Hubei and that express carrier SF Airlines will take a 40% position in the company.

ST Engineering is a major provider of aircraft maintenance services, with facilities in Asia, the U.S. and Europe. In China, the aerospace and technology firm operates MRO centers with freighter conversion capabilities in Guangzhou and Shanghai, as well as an engine maintenance hangar in Xiamen. The Guangzhou facility supports Elbe Flugzeugwerke GmbH, a joint venture with Airbus to convert used A321 passenger aircraft to a cargo configuration.

As the anchor customer with a fleet of 79 Boeing freighters, SF Airlines’ workload requirements will contribute to the joint venture’s operational stability during the startup phase, an ST Engineering spokesperson said.

The carrier is owned by S.F. Holding Co., which is traded on the Shenzhen Stock Exchange and also owns delivery company SF Express. Its fleet includes 757 narrowbody aircraft and 747 jumbo jets.

The joint venture will carry out freighter conversions, subject to market conditions, once the JV is running smoothly, the spokesperson added.

MRO demand in China and the Asia-Pacific region is estimated to increase at a compound annual rate of 3% to 7% over the next decade, according to industry forecasts. ST Engineering said the strategic collaboration with an established freighter airline will allow it to capture new business in a high-growth region.

With passenger and air cargo traffic growing steadily as China reopens air traffic following the COVID crisis, the joint venture will not only support the MRO demands of SF Airlines but also serve other cargo and passenger airlines operating in the region.

The joint venture is subject to regulatory approval and plans to have its first facility ready in 2025. 

(Correction: An earlier version of this story implied that Airbus is the majority stakeholder in EFW. It owns 45%.)

Click here for more FreightWaves and American Shipper articles by Eric Kulisch.


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