HAECO Signs Joint Venture Agreement with Air Arabia

Hong Kong Aircraft Engineering Company Ltd. (HAECO, Stock Code 00044) announced today the signing of a joint venture agreement with Air Arabia, first low-cost carrier in the Middle East and North Africa, to meet the airline's engineering and maintenance requirements. The new company, a 49:51 (HAECO:Air Arabia) joint venture, will be known as HAECO Sharjah Aircraft Maintenance Company Limited (HS-AECO) and will be based in Sharjah.

As part of the agreement, HAECO will assist in managing the operation of a hangar that is currently under construction at Sharjah Airport, together with setting up of related maintenance, repair and overhaul (MRO) operations specialising in Airbus A320 aircraft.

Commenting on the announcement, Sheikh Abdullah Bin Mohammed Al Thani, Chairman of Air Arabia, said: "This joint venture agreement represents another significant step forward in the ongoing upgrade of services at Sharjah Airport generally and of Air Arabia in particular. We are very pleased to partner with HAECO, a global leader in aeronautical engineering, and to be able to offer state-of-the-art maintenance services from our global hub in Sharjah."

Adel Ali, Chief Executive Officer of Air Arabia, said: "The JV with HAECO is very strategic in nature and should be seen in the light of Air Arabia's plans to have a fleet of 34 aircraft by 2016. Fleet expansion coupled with growing customer base will lead to a situation wherein huge resources would be required to maintain our high quality standards. HAECO is an expert in maintenance, repair and overhaul and it is imperative for us to leave such tasks to the specialist. This way, we can continue to concentrate on our benchmark customer services."

Mr. PK Chan, Deputy Chairman and Chief Executive Officer of HAECO, said: "I am delighted that this joint venture with Air Arabia provides us with a unique opportunity to position ourselves in the Middle East, one of the world's most vibrant aviation regions. This agreement is very much in line with our expansion plans and strategy. We are grateful to the Sharjah Civil Aviation Department, the Sharjah International Airport Authority and Air Arabia management for the confidence they have placed in HAECO. We look forward to a mutually beneficial long-term relationship."

Sharjah-based Air Arabia, which began operations in October 2003, will become the first airline in the Gulf region to go public when it launches an Initial Public Offering (IPO) in the near future. Having served more than 3.4 million customers since it began operations and currently serving 32 destinations, Air Arabia has been profitable since its second year of operations.

About HAECO: HAECO, one of the world's leading aeronautical engineering groups, is engaged in the maintenance, modification, repair and overhaul of commercial aircraft and their components, including passenger-to-freighter conversions. The company offers a comprehensive package covering transit and technical services with full hangar support in Hong Kong. HAECO is publicly listed on the Hong Kong Stock Exchange.

About Air Arabia: Air Arabia was established in February 2003 by an Amiri decree issued by His Highness Dr. Sheikh Sultan Bin Mohamed Al Qassimi, Ruler of Sharjah and Member of the Supreme Council of the United Arab Emirates. The company began operations in October of the same year.

Based in Sharjah and with a fleet of nine Airbus A320 aircraft, Air Arabia serves 32 destinations across the Middle East, North Africa, Indian Subcontinent and Central Asia, including Afghanistan, Bahrain, Egypt, India, Iran, Jordan, Kazakhstan, Armenia, Kuwait, Lebanon, Oman, Nepal, Oman, Qatar, Saudi Arabia, Sri Lanka, Syria, Sudan, Turkey and Yemen.

Air Arabia is modeled after leading American and European low-cost airlines and is customized to local preferences. Its main focus is to make air travel more convenient through Internet booking and offering the lowest fares in the market without sacrificing on service or safety standards.