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.