Singapore-listed SIA Engineering Company Limited (SIAEC) has entered into a JV agreement with Air Innovation Korea o form a line maintenance joint venture based in the Republic of Korea.
Under the agreement, SIAEC will hold an equity stake of 51% in the Joint Venture, with AIK taking the remaining 49% stake. The agreement and services to be provided are subject to the receipt of regulatory approvals.
The Joint Venture company will have an initial registration capital of KRW 4,772,000,000, or approximately S$5,525,212. SIAEC will subscribe for KRW 2,433,720,000, or approximately S$2,817,858, in cash and AIK will subscribe for KRW 2,338,280,000, or approximately S$2,707,354, in cash.
This partnership supplements the Aero-K Airlines’ (“Aero-K”) A320 CEO / NEO fleet Inventory Technical Management Programme where SIAEC will support the airline for component pooling as well as repair and overhaul management services commencing in March 2020.
The services will be provided for a period of six years for each fleet type. Aero-K, a wholly owned subsidiary of AIK, plans to commence operations in March 2020 from their base in Cheongju International Airport in the Republic of Korea. Aero-K is expected to operate 4 A320 aircraft by end 2020, growing to 15-20 aircraft within 5 years.
This news follows on from an announcement by SIAEC last week that Engineering Company Pos Aviation, a wholly owned subsidiary of Pos Malaysia, to acquire a 49% stake in Pos Aviation Engineering Services (PAES).
Under the agreement, Pos Aviation will retain the remaining 51% stake. PAES has operations in Kuala Lumpur International Airport and 9 other stations in Malaysia. These stations will complement SIAEC’s existing network of Line Maintenance International stations, which will grow to 46 airports in 9 countries including Singapore.
Kim Chiang, chief executive of SIAEC, said: “With the combined strength of both parties’ capabilities and experience, we are confident that this strategic partnership will deliver a high level of despatch reliability and quality engineering services to international airline customers in Malaysia.”