[HONG KONG] Airlines are booking in their planes for maintenance years ahead of time in order to secure a slot as supply chain issues crimp the availability of crucial parts and servicing, the head of one of the world’s biggest jet overhaul and engine servicing firms said.
Carriers “want security of supply. They want to know they have got a home for their aircraft” when it needs maintenance, Richard Sell, the chief executive officer of Hong Kong Aircraft Engineering, said.
Instead of the shorter three- to five-year maintenance and repair contracts typically common in the industry, airlines are now opting for 10-year-plus deals, Haeco said. With commercial aviation expected to expand 3.8 per cent annually over the next two decades, according to the International Air Transport Association, airlines are jostling for the services of top-tier MRO (maintenance, repair and overhaul) firms.
The extended groundings of jets fitted with Rolls-Royce Holdings and RTX’s Pratt & Whitney engines since the pandemic is only adding to the backlog. Plane repair firms such as Haeco are also seeing business rise as carriers seek to extend the life of their older planes, considering the long delivery delays at both Airbus and Boeing.
Haeco, which competes with Lufthansa Technik and ST Engineering, booked record sales in 2024, with revenue of HK$21.6 billion (S$3.7 billion). “We are as full as we can be in almost all of our businesses,” Sell said, noting Haeco’s peers are in a similar position.
Some carriers are taking matters into their own hands.
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British Airways is purchasing a jet hangar from Boeing to make room for unscheduled repair work, while Ryanair Holdings is looking to set up its own engine maintenance shops. Thai Airways International and local rival Bangkok Airways have said they plan to pair up on aircraft maintenance opportunities.
With demand for MRO services so strong, Haeco expects a “significantly” better year ahead. “If 2024 was largely an activity story, getting up to where we needed to be post-Covid, 2025 is going to be more around productivity and efficiency to drive those incremental benefits,” Sell said.
Haeco, a subsidiary of Swire Pacific, will next year open the world’s largest single-span hangars in Xiamen as part of a US$550 million investment in China. The outlay will replace an existing base the firm had in Xiamen and mean Haeco will be capable of handling 12 widebody aircraft and six single-aisle jets in its facility at any one time.
Haeco services some 140 airlines globally, including Cathay Pacific Airways and United Airlines Holdings. BLOOMBERG
