SIA Engineering enters into Korean joint venture agreement for line maintenance

   SIA Engineering shares closed flat at $2.57 on Friday (Feb 14) before the announcement was made.
SIA Engineering shares closed flat at $2.57 on Friday (Feb 14) before the announcement was made.PHOTO: ST FILE

SINGAPORE (THE BUSINESS TIMES) - Mainboard-listed SIA Engineering has entered into a joint-venture agreement with Air Innovation Korea to form a line maintenance JV based in South Korea.

In a statement filed on Saturday (Feb 15) with the Singapore Exchange, the Singapore provider of aircraft maintenance, repair and overhaul services said it will hold an equity stake of 51 per cent, with the Korean partner taking the remaining in the JV, which will have an initial registration capital of 4.77 billion won (S$5.6 million).

The partnership supplements Air Innovation Korea's wholly-owned subsidiary Aero-K Airlines' A320 CEO / NEO fleet inventory technical management programme. SIA Engineering will support the airline for component pooling as well as repair and overhaul management services from March.

The services will be provided for a period of six years for each fleet type.

The agreement and services to be provided by the JV require regulatory clearance.

Aero-K expects to be operational in March from its base in Cheongju International Airport in South Korea and operate four A320 aircraft by end-2020, growing to 15 to 20 aircraft within five years.

SIA Engineering said the partnership and the inventory technical management programme are not expected to have a material impact on its earnings per share or net tangible assets per share for the financial year ending March 2020.

SIA Engineering shares closed flat at $2.57 on Friday before the announcement was made.