• 

  Air China

  IATA/ICAO Code:

  CA/CCA

  Airline Type:

  Full Service Carrier

  Hub(s):

  Beijing Capital Airport, Beijing Daxing Airport, Chengdu Shuangliu International Airport

  Year Founded:

  1988

  Alliance:

  Star Alliance

  CEO:

  Cai Jianjiang

  Country:

  China

  Airline Group:

  Air China Group

  Region:

  Asia

• 

  Rolls-Royce

  Stock Code:

  RR

  Date Founded:

  1906-03-15

  CEO:

  Tufan Erginbilgic

  Headquarters Location:

  London, United Kingdom

  Business Type:

  Engine Maker

  Key Product Lines:

  Trent Engine, Pearl Engine

Air China and manufacturer Rolls-Royce have announced they are entering a new 50:50 joint venture for a maintenance, repair, and overhaul (MRO) facility in Beijing, China. The new facility is named Beijing Aero Engine Services Company Limited (BAESL) and will provide MRO support on the Rolls-Royce Trent 700, Trent XWB-84, and Trent 1000 aero engines. Air China currently has all three engine types in its fleet.

Powering China and beyond

Worth around 2.61 billion yuan ($378 million), the joint venture comes amid growing export restrictions from the US on advanced technology and additional curbs on international travel to and from China. It aims to fill the gap in high-thrust engine maintenance within the country. It will also promote the development of aviation services, high-end manufacturing, technology research, and development within the economic zone of Beijing Capital International Airport, where BAESL will be built.

Today, Rolls-Royce powers 60% of China’s widebody fleet, powering more than 550 aircraft in service or on order. The British manufacturer's Trent 700 engines also power 90% of the country’s Airbus A330 fleet, and at total capacity, expected to be achieved in the mid-2030s, BAESL will be able to support up to 250 shop visits per year. The facility will offer MRO services to Air China and other airline customers based in China and beyond.

Ma Chongxian, President of Air China, said:

“With safe operation as a top priority, Air China has long been committed to developing aircraft maintenance capabilities and ensuring the fleet's reliability, meanwhile striving to promote the industrialization of aircraft maintenance. In the future, Air China and Rolls-Royce will continue to deepen our profound partnership and start a new journey of cooperation in high thrust engine maintenance. We look forward to building the Joint Venture into a world-class aero engine MRO company and increasing the volume of China’s civil aero engine MRO industry."

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A bigger global expansion

Aviation has long been highlighted as a critical area of investment in China's 14th five-year development plan covering the years 2021 to 2025, with several local governments committed to investments and attracting foreign firms. This will make the joint venture a key strategy in the country's big plan. In recent years, Rolls-Royce has suffered from dipping revenues due to declining demand for its widebody engines, making BAESL a crucial part of Rolls-Royce's strategy for China in expanding the British manufacturer's global network and in cost-effectively increasing its MRO network.

Chris Cholerton, President of Civil Aerospace at Rolls-Royce, said:

"The announcement of this joint venture is an important milestone for Rolls-Royce in China, where we have been powering the nation’s airlines for more than 50 years. Air China is a strategic partner for us, having successfully grown together over many years. I am delighted to expand our relationship with this exciting partnership in MRO and look forward to the continued growth of our collaboration.”

Bottom line

BAESL would be the first joint venture maintenance company located on the Chinese mainland and the fourth worldwide for the Trent engine series in the Rolls-Royce global maintenance network. As long-haul flights continue to recover slower than regional and domestic flights, the joint venture would help alleviate this by further solidifying the British manufacturer's establishment within China while also helping enrich the maintenance sector within the country.