Chinese 2013 MRO Growth Rate Falls Short

By Bradley Perrett
Source: Aviation Week & Space Technology
February 03, 2014
Credit: MTU Maintenance Zhuhai

In China, growth is taken for granted; disappointments come when it is not what was expected.

As China's airlines have suffered weakening demand over the past year, an echo has been heard in the maintenance shops that support their operations. Like the airlines, some in the maintenance field are finding that although business has been up it is not as strong as had been expected.

New opportunities are on the horizon, however, in the form of new airlines unaffiliated with China's major state carriers. That is especially good news for maintenance shops that are similarly unaffiliated. And the prospect of a permanent slowing in China's economy may be offering a crucial advantage for the maintenance industry that it has barely considered: prolonged competitiveness.

Industry-wide figures are not available, but one of the major airframe maintenance shops in China, partly owned by one of the biggest airlines, says it planned for 10-12% business growth for 2013, measured in worker hours. Instead, it grew 7-8%. Another, Taeco of Xiamen, says it was not optimistic about demand from Chinese customers at the end of 2012 when it made its 2013 business plan, and the business turned out to be no better than expected.

Not everyone has been much affected. Engine overhaul shop MTU Maintenance Zhuhai, which specializes in CFM56 and IAE V2500 engines, did not detect much of a downturn in business, says CEO Frank Bodenhage.

Although Chinese airline passenger traffic grew fairly strongly last year, demand was weak. The carriers evidently discounted to fill their aircraft, resulting in the disappointing operating results commonly reported across the industry. It may be that some airlines deferred maintenance, since aircraft that were due for major checks were not urgently needed in service.

This slow growth was probably just a temporary dip in the road, says Norbert Marx, general manager of Guangzhou-based airframe maintenance shop Gameco. “We will continue similar growth rates as were projected previously,” he says, pointing to the reliable figures on how many aircraft Chinese airlines have on order.

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