HAECO and Cathay Pacific Form Joint Venture to Provide Inventory Technical Management Services

Hong Kong Aircraft Engineering Company Limited ("HAECO") and Cathay Pacific Airways have teamed up to form a joint venture company, HAECO ITM Limited ("HXITM"), in Hong Kong to provide inventory technical management services to Cathay Pacific, Dragonair, as well as other airline customers.

HAECO ITM services primarily cover provisions and pool management of components inventory, management of component repairs/overhaul and engineering/reliability, supply chain management, and 24/7 AOG support.

HXITM, 70%/30% owned by HAECO and Cathay Pacific respectively, will be managed by HAECO, with staff secondment from the existing HAECO ITM business and Cathay Pacific Engineering, combining the technical expertise and operational excellence from a leading airline group and a top-tier aircraft engineering service provider. The joint venture will take over HAECO's existing aircraft component assets, combine it with Cathay Pacific's existing inventory, to support both Cathay Pacific, Dragonair, and other airline customers.

HAECO Chief Executive Officer Augustus Tang said: "This is a milestone development for HAECO. The global trend is that airlines will outsource more non-core capital intensive engineering activities such as component management to service providers. This transaction enables improved economies of scale and creates synergies with Cathay Pacific, putting the best-in-class joint venture organisation in a strong position to manage supplier relationships and secure potential customers in the Asia Pacific region where strong growth is expected."

Cathay Pacific Engineering Director Christopher Gibbs said: "We are pleased to have reached agreement with HAECO to establish a joint venture company to provide ITM services to Cathay Pacific, Dragonair and other carriers. HAECO ITM brings together the strengths of the partners to form what is destined to be a world-class service provider. Cathay Pacific is expected to benefit from improved asset utilisation and cost competitiveness the partners will jointly create."

Mr. Tang further added: "The HAECO ITM component pool is based in Hong Kong, with excellent air freight network and cargo handling infrastructure. As we grow the business, it will also create air freight volume for HKIA and employment opportunities for aircraft engineering professionals, further strengthening the Hong Kong hub in the future."

HAECO Chief Executive Officer Augustus Tang (R) and
Cathay Pacific Engineering Director Christopher Gibbs
were pictured at the signing ceremony of HAECO ITM Limited.

About Hong Kong Aircraft Engineering Company Limited ("HAECO")
HAECO is one of the world's leading aeronautical engineering groups providing a comprehensive range of services encompassing Airframe Maintenance, Cabin Reconfiguration / Integration Services, Cabin Completion Centre / Design Engineering, Freighter Conversion, Parts Manufacturing, Line Maintenance, Fleet Technical Management, Inventory Technical Management, Component Services, Engine Overhaul and Technical Training. The HAECO Group consists of 16 subsidiaries and affiliates, employing over 14,000 staff in Hong Kong, Mainland China, Singapore and Bahrain. In 2012, HAECO was awarded the "Leading Independent Organisation" by Aviation Week and voted as the "Best Airframe MRO Provider - Asia" at the Aircraft Technology Engineering & Maintenance Awards. HAECO is publicly listed on the Hong Kong Stock Exchange (Stock Code: 00044). HAECO's website: www.haeco.com.

About Cathay Pacific
Cathay Pacific Airways is a Hong Kong-based airline offering scheduled passenger and cargo services to more than 160 destinations in Asia, North America, Australia, Europe and Africa, using a fleet of 137 wide-body aircraft. The company is a member of the Swire group and is a public company listed on the Hong Kong Stock Exchange. Dragonair is a wholly owned subsidiary of Cathay Pacific, and the airline also has a 60% stake in AHK Air Hong Kong Ltd, an all-cargo carrier operating regional express freight services. Cathay Pacific has made substantial investments to develop Hong Kong as one of the world's leading global transportation hubs. The airline is a founder member of the oneworld global alliance.