After three years of negotiations, engine manufacturer CFM International and Chinese flag carrier Air China have formed a joint venture to repair and overhaul CFM56 engines in China.

Air China will own 60% of the venture, and CFMI 40%. They will take over the facilities of Sichuan Snecma Aero-Engine Maintenance in Chengdu, a business nurtured by Snecma over the years. Snecma is a joint owner with GE in CFM International.

The engine shop will become the first in the world to wear the CFMI nameplate in a strategy designed to simplify the manufacturer’s relationships with airlines and reinforce the CFM brand name. Airlines buying CFM engines currently have to choose between Snecma and GE—or third party shops—for their maintenance.

The Chengdu shop currently has a capacity of some 50 engines a year, and had previously been considering a multi-year expansion to several hundred shop visits annually after the deal with Air China. But details of future plans remain sketchy until the deal has received Chinese government approval, hoped for within 60 days, a CFM spokeswoman said.

The intention to form a joint venture was part of a 2007 sale of 48 CFM56 engines to Air China, which already had a fleet of 200 CFM engines. Now the deal has been cemented as part of a 15-year materials management agreement for CFM to supply Air China with a full range of new, used and repaired material offerings, tailored to the specific requirements of each individual engine overhaul.

The deal also had its genesis in Air China signing a 20-year deal with Sichuan Snecma in 2007 to overhaul its CFM56 engines. But Air China, the only major airline in China without its own engine shop, later felt it wanted part of the action itself instead of relying solely on a third party.

Photo credit: Snecma