Airport Authority signs aircraft maintenance franchise agreement with Hong Kong Aircraft Engineering Company Limited

(HONG KONG, 30 October 1996) -- The Airport Authority (AA) today signed an agreement with the Hong Kong Aircraft Engineering Company Limited (HAECO) to provide aircraft maintenance at Hong Kong's new airport at Chek Lap Kok.

HAECO is required to provide both base and line aircraft maintenance services at the new airport for a term of 20 years. The terms of the agreement signed today were agreed by the British and Chinese sides of the Airport Committee of the Joint Liaison Group in May this year. The agreement stated that line maintenance franchises may be awarded to China Aircraft Services Limited (CASL) and Pan Asia Pacific Aviation Limited (PAPAS), and a combined line and base maintenance franchise to HAECO. The agreement with PAPAS was signed on 27 September 1996, and the CASL agreement on 10 October.

Line maintenance services include mainly routine servicing of aircraft performed during normal transit periods, routine turnaround periods and regularly scheduled layover periods. Base maintenance services include all heavy maintenance services, and are usually performed in a maintenance hangar.

HAECO has been providing a full range of aircraft maintenance services at Kai Tak for more than 40 years. Under this agreement, the company will develop a three-bay hangar with adjoining workshops at the west end of Chek Lap Kok airport for base maintenance for a capital investment of about HK$1.4 billion.

HAECO's major shareholders are Cathay Pacific Airways Ltd and Swire Pacific Ltd. The remainder of the company is publicly owned.

Ref. PR-242