Rolls-Royce launches new plant in Beijing

British industrial conglomerate Rolls-Royce broke ground on its Beijing Aero Engine Services Co Ltd (BAESL) in Beijing on Thursday — its 50/50 joint venture maintenance, repair and overhaul (MRO) facility established with Air China — as the company is bullish on the growing demand for after-services of jet engines in China.

The facility is expected to be operational in 2026 and reach full capacity in the mid-2030s. By then, it will be able to support up to 250 engine repair services annually. The facility has become Rolls-Royce's largest investment on the Chinese mainland and one of the largest globally in recent years.

When it reaches full capacity, the facility will employ 800 workers, mainly recruited and trained locally, to deliver MRO services on the Rolls-Royce Trent 700, Trent XWB-84 and Trent 1000 aero engines, which are mainly installed on widebody aircraft such as the Airbus A330 and A350.

Covering an area of more than 80,000 square meters, the facility serves as the first Rolls-Royce MRO joint venture on the Chinese mainland, and the fourth in its global MRO network.

"About 20 percent of our global Trent engines have been delivered to China, and after-service in the country will grow slightly faster than the global average," said Rob Watson, president of civil aerospace at Rolls-Royce.

"When it enters into operation in 2026, BAESL will support the growing MRO capacity requirements of our global customers and, in particular, those in the region. Now our third-largest single-country market, China is an important part of our supply chain," said Watson, who visited China this week, the first major overseas visit in his new role.

Entering the Chinese market in 1963, Rolls-Royce now operates five joint ventures in China including BAESL. Located in Beijing, the new facility supports Rolls-Royce's sustainability goals by reducing the overseas transportation of engines for MRO services.

After China optimized its COVID-19 prevention and control measures late last year and restarted quarantine-free international travel in January, demand for domestic and international travel has been on a steady track of recovery and growth.

Over the next 20 years, Chinese carriers are expected to acquire 9,440 new aircraft to meet expanding commercial air travel demand, according to a recent forecast from European aircraft manufacturer Airbus.

"BAESL is poised to enter a construction phase. Once operational, it will effectively improve Air China's high-thrust engine operation and further ensure the safety of our fleet," said Ni Jiliang, senior vice-president of Air China and chairman of BAESL.

"Air China has been consistently dedicated to developing aircraft maintenance capabilities, ensuring fleet reliability and enhancing the industrialization of aircraft maintenance," Ni said.

This year, the flying hours of Rolls-Royce engines globally have recovered to 85 percent of pre-pandemic levels. The company expects it will fully resume to pre-pandemic levels in 2024.

Depending on the temperature and environment in which the aircraft operates, it takes about two to three years before an overhaul of jet engines. As engine flying hours grow, it will drive demand for after-services, Rolls-Royce said.

In the first six months, Rolls-Royce saw booming business performance in terms of profits. The company is eyeing exciting opportunities to grow in the next five years, especially in China, it said.