CKH HOLDINGS' China Aircraft Services collaborates with Elior Asia to establish an aircraft parts trading center in Hong Kong

CKH HOLDINGS (001) has a stake in China Aircraft Services, which has signed a memorandum of cooperation with the French aviation service company Elior Asia to establish a joint venture to develop aircraft dismantling business in Hong Kong and set up the first aircraft parts trading center, thereby establishing Asia's first sustainable supply chain for retired aircraft. China Aircraft Services CEO Norbert Marx stated that there is a global delivery gap of 5,000 aircraft, leading to increased demand for replacement parts and components, and Hong Kong's positioning can attract customers from Southeast Asia and Belt and Road countries. Airlines can handle retired fleets in Hong Kong According to the memorandum of cooperation, the joint venture will be equally owned by China Aircraft Services and Elior Asia, each holding 50%. It will operate in the hangar of China Aircraft Services at Hong Kong International Airport, handling the multi-stage process of aircraft retirement, including dismantling, parts re-certification and trade, as well as metal recycling. China Aircraft Services indicated that the company has developed mature capabilities in aircraft maintenance, while Elior is a global expert in sustainable aircraft retirement and recycling services. This cooperation provides airlines in Asia with an additional option to handle retired fleets in Hong Kong. Norbert Marx pointed out that since 2019, the global aircraft delivery gap has exceeded 5,000 aircraft, one of the main reasons being the shortage of engine supply, which has forced many aircraft to postpone their retirement, driving up demand for replacement parts and components. He further stated that due to insufficient supply of aircraft components, the development potential of the retired aircraft dismantling market is enormous, with up to 90% of materials and components from each retired aircraft, from turbine engines to shell metals, being recyclable for replacement and reuse in other aircraft. Joint venture to commence operations this year Marx expects the joint venture to commence operations this year, hoping that aircraft will continuously come to Hong Kong for retirement every one to two weeks, with parts circulating in the trading market. He also noted that due to the aviation industry's need to cope with geopolitical risks and consider retirement disposal costs, establishing an aircraft parts trading center in Hong Kong can connect with the Chinese supply chain, attracting aircraft from Southeast Asia and Belt and Road countries for retirement, making it more competitive compared to retiring in European and American markets. However, he emphasized that the company engages in international business and welcomes any aircraft from around the world to come to Hong Kong. China Aircraft Services is primarily held by CKH HOLDINGS and AVIC Group, each holding 47.97%, with the remaining 4.06% held by China Airlines. In fact, CKH HOLDINGS also played a role in promoting this cooperation. Marx mentioned that CKH HOLDINGS is an international group that understands the aviation management industry, which is also an international field, and strongly supports the cooperation between China Aircraft Services and Elior to promote new developments in Hong Kong's aviation service industry. Elior Group Asia CEO Zhang Yi pointed out that establishing a presence in Hong Kong not only develops a sustainable aviation recycling ecosystem but should also promote the development of related industries in Hong Kong, such as aviation insurance, and attract more aircraft leasing companies to develop in Hong Kong. She also expressed hope that the government could provide support for the industry, stating, "We do not seek tax reductions, but hope to assist in promoting the industry externally."