China Airlines A350-900 Airbus/H. Gousse

Nordam, China Airlines Formalize New Structures MRO Joint Venture

Facility will serve China Airlines aircraft and seek third-party work.

Nordam and China Airlines have formalized a wide-ranging agreement that will see the two companies open a structural component repair facility that will serve both the carrier and third-party customers in the Asia-Pacific region.

The new facility, Nordam Asia Ltd., is slated to open in 2019 in Taipei and will focus on serving the China Airlines fleet, including subsidiaries Tigerair Taiwan and Mandarin Airlines.

The agreement, which solidifies a memorandum of understanding announced in March, gives Nordam a steady flow of work from a partner carrier, while establishing a beachhead in the booming Asia-Pacific region to serve other operators.

For China Airlines, it in-sources a segment of MRO work—primarily thrust reverse overhauls—for its own fleet and grows the company's aftermarket presence even more. China Airlines, which has a well-established engineering arm with a workforce of about 2,300—roughly the size of Nordam's entire staff—has inked aftermarket-focused deals with both Airbus and Boeing in 2017. The airline and its subsidiaries operate a variety of aircraft, including Airbus A320s, A330s, A350s, Boeing 737NGs, 747-400s, 777-300ERs, ATR 72s, and Embraer ERJ-190s.

Nordam has worked with China Airlines for more than a decade, providing thrust-reverser MRO services and helping the airline develop its own composite repair capabilities. When the U.S. supplier identified the region as a logical spot for a new commercial MRO facility, partnering with China Airlines made sense, leading to discussions and, eventually, a deal.

As part of the agreement, Nordam expects to leverage China Airlines's cargo-hauling capability for "freight-cost advantages," the supplier says. China Airlines has an extensive freight-hauling operation, anchored by 18 dedicated 747-400 freighters.

"We share common objectives to develop, build and operate a cost-effective repair hub, capitalizing on affordable Taiwanese costs and impressive infrastructure,” says China Airlines’ Chairman Nuan-Hsuan Ho, who will serve as chairman of the new venture.

“Nordam specializes in providing ‘in-manual’ component repairs as well as innovative ‘out-of-manual’ repairs for customers around the globe,” says T. Hastings Siegfried, vice chairman of Nordam and the new venture. “Working together with China Airlines, we are improving access for all airlines in the Asia-Pacific region to choose our unparalleled expertise as a more cost-effective option.”

Citing "competitive strategy," the two sides did not disclose Nordam Asia's footprint, expected revenues or a detailed list of aircraft and engines it will service.

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