Cebu Pacific (CEB) gears up for further domestic and international expansion by forming another joint venture with SIA Engineering Company Limited (SIAEC), this time to set up an aircraft heavy maintenance facility in Clark International Airport.
This joint venture will result in the construction of three hangars in Clark over three years, which will provide heavy and light maintenance checks, not only to Cebu Pacific but other international airlines as well. Cebu Pacific expects that the presence of such a facility nearby will significantly enhance its dispatch reliability and engineering quality, as this will provide world-class maintenance services to Cebu Pacific’s fleet, currently the youngest in the country. Prior to this, services such as Maintenance, Repair and Overhaul (MRO) were done in the SIAEC facilities in Singapore.
“By the end of 2008, our fleet will increase from 18 to 25 aircraft and more brand new Airbus and ATRs are expected to arrive,” said Cebu Pacific president & CEO Lance Gokongwei. “Having a heavy maintenance facility practically outside our doorstep will greatly improve our operating efficiencies.”
Gokongwei added that the development of a premier MRO facility in Clark will bring a new wave of aerospace activities into the country. “SIAEC’s MRO expertise will boost the local talent pool of aerospace management and engineering personnel,” he said.
SIAEC has a 65-percent stake in the new venture; the Company’s 21st in its stable of joint ventures forged with airlines and original equipment manufacturers. Cebu Pacific holds the remaining 35 percent share. The initial investment capital for the construction of the three hangars, purchase of tools and equipment, and working capital is estimated to be S$81 million.
William Tan, SIAEC CEO, said: “This second joint venture with Cebu Pacific is testimony to the robust relationship and operational synergies between the two companies. With our confidence in the continuing growth and success of Cebu Pacific, we are delighted to further deepen our partnership with the joint investment at Clark International Airport.”
Tan also said that SIAEC plans to invest strongly in the infrastructure and workforce in the Philippines, to create a formidable and competitive MRO Centre of Excellence in the country. “The hangars in Clark will complement our maintenance base in Singapore to provide world-class MRO services to our global customer base.”
The first joint venture between Cebu Pacific and SIAEC was forged in 2004 for line and light maintenace of Cebu Pacific’s fleet.