Chinese MRO Meets Global Standards, But Environment Tough.jpg

Chinese MRO Meets Global Standards, But Environment Tough

Documentation and exports still challenging, major lessor goes digital.

Up to a few years ago, the perception was that many aircraft in China were not well maintained.

“That is no longer the case,” stresses Paolo Lironi, CEO of SGI Aviation, which advises Chinese and other operators on asset management. “The Chinese aviation authority is now aligned with international standards,” Lironi says. But there is now a huge effort by Chinese operators to improve maintenance documentation.

Chinese maintenance does not differ from that in, for example, the U.S. What does differ is the environment in which Chinese aircraft must fly, an environment subject to high pollution. Lironi says this pollution has implications for technical performance, especially engine performance.

Another characteristic of current aircraft markets in China is intense competition among Chinese leasing firms. These Chinese lessors tend to be very active, but limited in their interests. Lironi says they focus on aircraft, not engines, and want to invest only in Boeing and Airbus narrowbodies, which are liquid aircraft and can easily be moved around. The new Chinese leasing companies also prefer strongly to lease aircraft within China. “They are scared about repossessions when something goes wrong on leases,” Lironi notes.

Transfers at lease end were a problem up to a few years ago. But the SGI chief says redeliveries have improved and are no longer major problems. What can be challenges are the modifications required when a Chinese-flown aircraft is exported to another jurisdiction, like the U.S. or Europe, with different requirements.

Another challenge arises from the rapid growth in Chinese airlines. Redelivery staff who have become expert at preparing aircraft and documents at lease end may move or be promoted to other positions within their growing airlines, meaning new staff have to learn the ropes all over again.

Digitizing records could help, and the trend away from paper is gaining steam. For example, CDB Aviation Lease Finance, the Irish subsidiary of China Development Bank Financial Leasing Company, has just selected FLYdocs software and technical services for, initially, 100 commercial aircraft. The first fully digital aircraft transition enabled by FLYdocs is expected in autumn 2018.

In any case, Lironi says the right approach to redelivery in China is the same as in the rest of the world. “Redelivery is a long-term project. The airline’s legal department must not wait until two months before lease end to share the lease agreement with engineers.”

TAGS: Asia Pacific
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