Page 28 - AAA JULY - AUGUST 2013 Online Magazine

FeATure Mro JoinT venTures

JV Joy

One significant aspect of MRO development in Asia is the rise and rise of JV operations.
Existing major players from the West tie up with an existing local company, supply their
extensive expertise and scale, then take advantage of lower operating costs. But does
it work? Can local operators to extend their capability as required by international
standards? Different management, working and certification requirements demand
new approaches at all levels. Asian Airlines & Airports finds out how the successful
players come up with the right mix.

“AsiA is no Longer A MArKeT For “Chinese MRO providers [have to] … Even though the foreign companies
overseas MROs alone,” says Adrien set international vision and professional will already have great depth of expertise,
Moreau, AFI KLM E&M sales director for management concepts, build up an an excellent brand and solid market
North East Asia. “Since more and more MRO brand image, enhance marketing penetration, it is still worth looking at JVs
[MRO] capabilities are being established and create a fair and honest business with other locally established names, says
locally, if any foreign MRO wants to remain environment,” notes Zhu Xiao, Executive Andrew Herdman, DG at the Association
in this market, they have to come to Asia Director, Sales & Supply at Ameco Beijing. of Asia Pacific Airlines (AAPA). “Rising
to set up their foothold locally.” All this takes time and a certain cultural economies of scale in the MRO business
But simply arriving at a transport adaptation; something that is hard to cost have led to some consolidation in the
hub, importing a few foreign-trained in to a spreadsheet but that is essential if sector, [with] the proliferation of joint-
engineers and investing in tooling is the JV is to flourish. venture activities, often involving OEMs as
not enough. Language competence in Ameco Beijing has a good track key strategic partners,” he says.
complex technical issues is a must. Many record so far; established in 1989 as a Indeed, it’s not just minor players
countries demand that any new venture Lufthansa/Air China JV, the company seeking local advantage from strategic
be shared with local providers. Staffing services operators like Nok Air, MEGA JVs. Such big names as Singapore
must include locally sourced personnel. Maldives Airlines, Business Air, Southern Airlines and Rolls-Royce are seeing
Any certification must be approved by Air, ACT Airlines and T’way Air as well as the advantage and snuggling into bed
local standards bodies – sometimes with a long list of airlines from North America, together across Asia. The two companies
relatively impenetrable procedures and Europe, Russia/CIS, and the Asia Pacific have signed an MoU to develop and
requirements for a non-native speaker. area. Zhu says the JV’s success is not just integrate engine MRO, and to “establish
Setting up an MRO from scratch in Asia is due to its expertise alone, but has a strong an integrated and embedded service
not a straightforward process. resonance because of its established provision … to provide on-wing care for
“There are big challenges from the ability to work with other operations in Trent 800 and 900 engines and in future,
competition of local MROs,” adds Moreau. the region – a kind of JV’s JV, if you like. Trent 1000 and XWB engines.”
“Only by offering customised services, “At the same time, we are looking The new JV with Singapore Airlines
adaptiveness, competitive pricing and for [further] cooperation opportunities Engineering Company (SIAEC) and Hong
a strategy to continuously develop new among companies and industries by Kong Aero Engine Services Limited
capabilities … will favour MRO success,” changing focus from marketing into (HAESL) will see Rolls-Royce making
he notes. The management at Ameco resources,” Zhu explains. Keeping up Singapore a centre for Trent 900 support,
(Aircraft Maintenance and Engineering with the JV Jones’s demands constant and in the future, a centre for Trent 1000
Corporation) Beijing, one of the more attention, it seems. delivery and service support, says the
successful MRO JVs in China, agrees company in a release.
that making a JV work requires a much ups and downs
broader focus than just investing in Although some big names (especially in
spares and technical skills – especially as the power plant market) are keen to keep opposiTe pAge: AMECO
the Asian region has much less of a track their brand pure and not dilute it with JVs, Beijing is one of the most
record than some other more established it appears there is a strong argument for successful examples of
zones such as Europe or North America. collaboration across Asia. JVs set up for MRO
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