1. Market for MRO Services in China
The global MRO market today is worth approximately $48US billion. Approximately two-thirds of the MRO market is split between North America and Western Europe. Over the next 20 years, the center for gravity of the world’s airline fleet will tilt toward the Asia-Pacific region. According to Boeing, more than one-third of the value of all new airplanes delivered between now and 2026 will be accounted for by Asia-Pacific.
China represents a large portion of this growth. According to Boeing’s Current Market Outlook 2007, China’s air traffic volume will grow at an average rate of 7.3% annually over the next two decades. Over the last six years, the Chinese airline fleet has doubled from 560 to 1,150 airplanes. Boeing expects that the Chinese domestic market for air traffic will grow nearly fivefold by 2026 to become slightly larger than today’s North American market.
The market for MRO aviation services in China can be expected to grow as China’s fleet grows. The U.S. plane maker estimates that the jet overhaul market will grow 10 percent annually. Not only will MRO services be demanded by the China-based aircraft, but also by other non-Chinese airlines across the globe that choose to have their airframes serviced in China.
"Working together, we are taking the first of many steps toward offering our airline customers the services that will help them safely and efficiently expand, while keeping pace with the tremendous growth in commercial aviation that we see in China over the next 20 years," Scott Carson, president and CEO of Boeing Commercial Airplanes, said at the groundbreaking ceremony for the new facility.
2. Boeing’s New MRO Facility at Pudong
Boeing Shanghai Aviation Services will provide airplane modifications and maintenance, sale and repair of aviation equipment, and related engineering and technical services.
The BSAS facility is being constructed in two phases. Phase one includes a double-bay hangar, support shops, as well as fire, power and waste-treatment systems. Phase two extends the facility with another double-bay hangar, parts warehouse, engine shop, and ground-service equipment maintenance shop. When Phase Two is completed in 2010, Boeing Shanghai will have a four-bay hangar capable of housing four widebody aircraft, providing aircraft modification, maintenance, repair and overhaul services to help build Shanghai Pudong International Airport into an international aviation hub.
Ground was broken for the new Shanghai facility in October 2006. The first of Boeing Shanghai's hangars, due to be launched in April 2009, is already under construction at Pudong Airport and will be able to handle two large-sized 747 or two 777 airplanes. Phase Two will start being built at the end of 2007 and will be able to handle four 747s or four 777s airplanes together when completed in 2010.
BSAS’s primary MRO activities at the new Shanghai Pudong facility will be heavy and line airframe maintenance, as well as modifications for the
747 and
777 aircraft, and passenger-to-freighter conversions. The company has just completed its first MRO service for UBS Airlines and it is also working on a cooperation study with Shenzhen Airlines. It has signed lease contracts with Shanghai Airlines for a hangar bay for its aircraft maintenance while its own hangars are under construction.
"We are looking at all airlines in China as our potential customers," said Timothy Premselaar, chief executive officer of BSAS. "The growth is so big, it won't take long to have more than we can handle."
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