China Airlines expects its recent memorandum of understanding (MoU) with Boeing to explore opportunities in aircraft MRO will boost its engineering and maintenance prospects in the Asia-Pacific, but continuing political tension between Taiwan and China will keep the region’s biggest market out of reach for the Taiwanese flag carrier. Neverthless, the airline hopes the deal—still in its planning stages—will help boost profit margins beyond the meager .45 percent China Airlines (CAL) registered last year in the face of stiffening competition from mainland Chinese carriers and falling yields.
A CAL spokesperson told AIN that the capabilities of the airline’s engineering and maintenance organization include airframe maintenance, engine maintenance and repair of aircraft components. Current CAL maintenance capabilities cover all aircraft types it operates. The Taiwanese flag carrier flies the Boeing 777-300ER, 737-800 and 747-400F, while it remains in the process of retiring 747-400s delivered before 2004.
“Part of the partnership includes the expansion of capabilities for cabin and fuselage modifications for passenger aircraft,“ she said. “Closer collaboration will expand this to include collaborative development as well as the joint assessment of new technologies and business solutions.”
Boeing also hopes that CAL can qualify as an approved Boeing Global Fleet Care supplier and aid its qualification as a potential Boeing Converted Freighter (BCF) facility.
Based at Taoyuan Airport near Taipei, CAL’s engineering arm consists of 2,500 employees who service more than 100 passenger aircraft and freighters operated by the China Airlines Group and more than 40 domestic and foreign customers.
The Boeing MoU is similar to another signed with Airbus earlier this January. Taiwan’s minister of transport and communications, Tan Ho Chen, said at an Airbus A350 delivery event in October 2016 that he hopes Taoyuan can become an aviation hub like Hamburg with technological transfers from Airbus. Now, with another MoU with the "Taiwan-friendly" U.S. airframer, his plans appear one step closer to fruition.