There is no doubt in anyone’s mind that China is considered as being one of the most important markets for aircraft manufactures and aircraft systems suppliers for the
future.
On the other side, Chinese companies continue to look at and acquire what they see as interesting aviation companies outside of their borders.
RIFA keeps a low profile, but gathers speed
One example of outside China aviation acquisitions is the Zhejiang RIFA Holding Group, an investment company which is based in Hangzhou.
Reuters news Agency recently reported that RIFA has launched a takeover bid for New Zealand’s Airwork Holdings.
The bid is said to be for RIFA to take a majority holding of 75% in Airwork by offering shareholders $5.40 per share which would result in a payment of around $150 million.
RIFA’s main business portfolios has until now concentrated on investing in the textile and electronic machinery industry.
Investments outside China, especially in the so-called Oceania area have picked up during the past couple of years and RIFA has made some inroads into aviation investments also.
It seems they wish to expand further there.
Air Xiya, a general aviation and helicopter business, was launched by RIFA back in 2014.
The carrier offers a variety of services ranging from charter flights, agricultural spraying flights and air tours.
Airwork has an impressive fleet in New Zealand
By acquiring Airwork, RIFA hopes that because of China’s Civil Aviation Authority’s (CAAC) move in opening up the so called “low-altitude airspace“ to new entrants, that they can utilize
Airwork’s helicopter presence in China.
Alongside the above, Airwork also runs a fleet of Boeing 737 freighters which are mainly leased out to the New Zealand Post and NZ’s toll Priority.
The company has nine B737-300 and 400Fs in service along with almost thirty helicopters and is said to generate revenues in the region of US$180 million per annum.
Airwork is also licensed to carry out heavy maintenance on Boeing 737s and has two Fokker 27 freighters which are presently also leased to the NZ Post authorities.
Reports state that RIFA is particularly interested in expanding Airwork’s maintenance, repair and overhaul (MRO) facilities into China, other Asian countries and even as far as South
America.
The deal is not completed yet as the New Zealand Overseas Investment Office and certain Chinese regulatory bodies still have to give the green light.
Bedek and China join forces for B737 conversions
The demand for converted small and medium sized freighters in China continues unabated.
There are quite a few companies now offering Chinese postal and domestic freight carriers converted B737-300s, -400s and lately -700 aircraft.
Until now, companies such as PEMCO and Aeronautical Engineers have led the filed.
Tel Aviv-based Bedeck Aviation which is the aircraft conversion and MRO arm of Israel Aerospace Industries (IAI) previously had signed up with China’s Lingyun Science & Technology company in
order to start-up their own MRO area in Yichang in the Hubei province.
Operations started earlier this year under the name of Bedeck Lingyun Aircraft Maintenance Engineering.
Bedeck is licensed to convert B737-300 and B737-400 aircraft into freighters, but has not been active in that field for the past few years.
Now, both Bedeck and Lingyun are looking seriously at expanding the operation to include offering Chinese and other airlines a B737 conversion program.
The joint venture is expected to start moving in the early months of 2017.
Chinese carriers are reporting increasing cargo loads.
The data recently published by China’s CAAC for the month of July shows that Chinese carriers are continuing to increase cargo loads on their aircraft.
July showed an almost 7% increase on the same period last year on both international and domestic routes.
A total of 524,000 tons were moved with the percentage increase on domestic and international being almost on par.
John Mc Donagh
Write a comment