SIA, regional carriers team up for HK venture

SIA, regional carriers team up for HK venture

SINGAPORE (AFP): Singapore Airlines (SIA) has formed a joint
venture with several regional carriers to bid for an aircraft
maintenance base at Hong Kong's new Chek Lap Kok Airport,
officials said yesterday.

SIA Engineering Co. Ltd. (SIAEC), SIA's wholly-owned repair
and maintenance subsidiary, will hold a 40 percent stake in the
joint venture Pan Asia Pacific Aviation Services Ltd. (PAPAS).

The other partners in PAPAS are Malaysian Airlines System Bhd.
(MAS), which will hold a 20 percent stake, and Royal Brunei
Airlines Sdn. Bhd. and PT Garuda Indonesia, with 10 percent each.

The remaining 20 percent in the joint venture will be allotted
to other regional airlines, which may include Thai Airways,
Philippines Airlines and some Chinese carriers, SIA officials
said.

The joint venture hopes to invest about S$23 million (US$15.3
million) to corner the maintenance work on some 20 percent of
aircraft that will use the new airport, scheduled for completion
in 1997.

"The joint venture is significant because the partners are
coming together for the first time to seek business opportunities
in a location outside their own bases," said Robert Tan, SIAEC's
chief executive officer.

"The key motivation for the formation of the joint venture is
to generate competition and therefore ensure consistent, high-
priority and high-quality maintenance services at Chek Lap Kok,"
he said.

PAPAS, which is one of four consortia bidding for three bases
to be licensed at the airport, will initially handle aircraft
operated by stakeholders in the venture before offering services
to third parties.

The other groups vying for the licenses are the Hong Kong
Aircraft Engineering Co. Ltd., which is linked to the Swire
group, the China Aircraft Services Ltd., formed by a British and
Chinese consortium, and DynAir Consortium, a Sino-American group.

Incorporated in Hong Kong, PAPAS will initially have a paid-up
capital of S$2.06 million which will progressively increase to
S$13.74 million by 1997.