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AIDC Ventures into Jet-leasing Biz and Reports Winning New Orders

2013/12/17 | By Quincy Liang

The Aerospace Industrial Development Corp. (AIDC), a major state-owned aircraft manufacturer in Taiwan, recently announced to venture into the business jet leasing business by cooperating with a local corporate-jet operator and aircraft charter & management company.

At the partnership signing ceremony, J.T. (Jason) Liu, chairman of AIDC, also announced that his company will complete related works to become a fully privatized aerospace firm with an initial public offering (IPO) by September 2014, and challenge by 2017 annual revenue of NT$30 billion (US$1 billion).

In the first 10 months of 2013, AIDC had cumulative revenue of NT$19.29 billion (US$642.9 million), up 0.5% year-on-year (YoY), translating into net earnings of NT$1.49 billion (US$49.5 million), already surpassing 2012's total, and earnings per share (EPS) of NT$1.8 (US$0.06), which is expected to reach NT$2.2 to NT$2.3 (US$0.07) by year-end.

 J.T. Liu (fourth from left), AIDC`s chairman, announces AIDC`s venture into biz-jet leasing and charter service in front of a Astra Spx business jet.
J.T. Liu (fourth from left), AIDC`s chairman, announces AIDC`s venture into biz-jet leasing and charter service in front of a Astra Spx business jet.
AIDC, 100%-owned by the Ministry of Economic Affairs (MOEA), is capitalized at NT$9.08 billion (US$302.7 million), with the MOEA having made an announcement to release 51% shareholdings in AIDC from the second quarter of 2014.

AIDC will handle flight aviation and related repair and maintenance work in the new business jet venture. According to chairman Liu, AIDC was approved by the Civil Aeronautics Administration (CAA) to provide emergency medical, aviation tour, aircraft repair and maintenance etc. services as a jet charter provider, a milestone for the company.

Butch Hsu, AIDC's president, says that his company's capability in aircraft-parts manufacturing has been improving, being the world's second-largest production base of aircraft engine nacelles with annual production volume of more than 6,000 units, trailing only the U.S.

Tony Liou (right), vice president and general manager of AIDC, signed the agreement with representative from Honeywell to supply 50 aircraft engine assemblies.
Tony Liou (right), vice president and general manager of AIDC, signed the agreement with representative from Honeywell to supply 50 aircraft engine assemblies.
To expand production, AIDC will invest NT$1.2 billion (US$40 million) in the construction of its third factory in Gangshan, Kaohsiung City in southern Taiwan, which will be completed in mid-2016 and help elevate AIDC's engine-nacelle production capacity by 50%. The aerospace company also plans to invest another NT$2 billion (US$66.7 million) in setting up its second advanced composite parts factory.

Ever more Japanese aerospace companies have been releasing orders to Taiwan, Hsu said, and that AIDC's sub-contractors in Taiwan will purchase more than 120 five-axis machine centers in 2013.

The president said that Japanese companies with flooding orders are reluctant to outsource to Korean suppliers but have been looking for contractors in Taiwan, whose ample production capacity, good quality and on-time delivery have won more than NT$10 billion (US$333.3 million) of orders from Japanese customers.

AIDC`s president Butch Hsu (middle), and Latecoere`s head of Aerostructures Eric Gillard (left) show the agreement signed.
AIDC`s president Butch Hsu (middle), and Latecoere`s head of Aerostructures Eric Gillard (left) show the agreement signed.
Good News

AIDC has just signed a contract with Honeywell in mid-November to supply 50 engine assemblies and parts for the HTF-series aircraft engines, including TFE 731, TPE 331, APU, ATS, etc., with the 10-year contract to generate estimated revenue of NT$7 billion (US$233.3 million).

The maker has also won a sub-contract from Latecoere of France to supply composite parts for passenger doors on Boeing 787 Dreamliner, including skins, frames and beams, with the sub-contract signed by AIDC president Hsu and Eric Gillard, head of Aerostructures, Latecoere.

Hsu pointed out that by evaluating AIDC's capability and capacity investment in composite-material manufacturing, Latecoere recognizes AIDC as a reliable and high quality supplier, and that the cooperation with Latecoere is a significant achievement of AIDC's persistent pursuit of expanding business relationship with European countries.