China To Launch Crackdown on Unlicensed Repair Stations

 - April 8, 2014, 8:59 AM
While the majority of Chinese airlines use legitimate MRO companies such as Ameco Beijing, some smaller operators resort to unlicensed repair stations to cut costs. (Photo: Ameco Beijing)

Recent years have seen rapid expansion of fully licensed and internationally approved maintenance repair and overhaul providers, such as Ameco Beijing. However, at the same time, the Civil Aviation Administration of China (CAAC) continues to confront the problem posed by unlicensed repair and support companies across the country. According to a senior official with the agency, it is determined to put these illegitimate operations out of business and is planning to launch a new effort “soon” with the help of the police.

The CAAC’s Xu Liu told AIN that despite the administration’s success in closing scores of such companies over the last 10 years, many others have set up shop in the country’s hinterlands.

“The rapid expansion of China’s aviation industry and that of neighboring countries has prompted these companies to offer their services with low pricing, half of what licensed maintenance repair and overhaul companies charge,” Xu said.

The CAAC’s past investigation revealed that smaller Chinese airlines and possibly carriers from North Korea use the unlicensed companies to cut costs.

Xu declined to name the airlines, however, adding that the CAAC has severely reprimanded them. Meanwhile, the courts have prosecuted and ordered closed the unlicensed repair stations.

The companies first surfaced in the mid-1990s and started to mushroom across China during the aviation industry’s rapid expansion.

“It has been rather difficult to keep track of new companies setting up shop due to the vastness of China, but with more branch offices of CAAC being opened across the country, we have been able to keep the numbers down,” said Xu, who declined to estimate the number of companies the CAAC suspects remain in operation.

Believing that only stiffer penalties will discourage individuals from setting up shop without a license, the government is considering enacting a new law that would provide for the seizure of the guilty companies’ assets, among other deterrents.