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September 25, 2009

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Home » Business » Transport

Maintenance venture to cut airline's costs

CHINA Eastern Airlines launched a venture in aircraft engine maintenance with Pratt & Whitney in Shanghai yesterday to develop new sources of revenue and cut costs as it seeks to buttress profitability against waning demand caused by the global recession.

The country's third-largest carrier will hold 51 percent of the US$98 million joint venture with the United States giant in design, manufacture and servicing of aircraft engines.

"Within three years, the venture is expected to be capable of overhauling 300 engines a year, generating annual sales of 3 billion yuan (US$439 million)," said Li Yangmin, vice general manager of China Eastern.

A venture facility in Qingpu District will offer maintenance services on CFM56 series engines, which are mainly used in single-aisle jets such as Boeing 737s and Airbus 320s.

China Eastern operates more CFM56-equipped jets than any other carrier in the Asia-Pacific, and half of the new venture's orders will come from the Shanghai-based carrier.

The venture will offer maintenance prices about US$500,000 lower than charged by crews overseas.

Pratt & Whitney said it has submitted a proposal to the Commercial Aircraft Corp of China, producer of China's first domestically manufactured jumbo jet, to provide PW1000G engines for the aircraft.

"PW1000G engines can reduce the consumption of jet fuel by 15 percent more than other engines, as well as cut noise and gas emissions by 50 percent," said Todd Kallman, Pratt & Whitney president for commercial engines and global services.

China's engine maintenance industry is expected to expand quickly as the nation adds planes to keep pace with demand in the future.

The Aviation Industry Corp of China, the country's largest aircraft maker, said recently that China will need almost 4,000 new passenger planes in the next 20 years, nearly quadrupling the size of its current fleet.

That was in line with a Boeing forecast that China will need 3,770 new commercial planes by 2028.


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