USA: Concerns are growing about the unpredictable nature of Rolls-Royce, a Chinese supply chain that has been disrupted by stringent coronavirus control measures.
The British aerospace company is ramping up its investments in the still-important aviation market.
Julian McCormack, Rolls-Royce country manager in Greater China, said earlier in the pandemic, from 2020-21, the aircraft engine maker saw relatively little disruption to its supply chain in China because of its management of the coronavirus outbreak.
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And it gives us a lot of reassurance about how China can control the pandemic and how we can further rely on our supplies in China, McCormack told the Post while speaking to media outside the Zhuhai Air Show last week.
However, this year, that belief has waned. Under a zero-Covid policy that still requires long lockdowns, mass screening, strict border controls and quarantines, coronavirus controls that once relaxed the company have continued and become more strict.
McCormack noted how the lockdowns and disruptions had an impact on the aerospace company's suppliers and manufacturing facilities in Liaoning, Shaanxi, Sichuan and Jiangsu provinces.
As a result of the COVID-control measures, he claimed, "The situation for 2022 has been more worrying: we have seen more blockages inside China." “The last 12 months in lockdown have been quite uncertain, and we have worked hard to manage it.
“It has been difficult in terms of logistics and shipping as well as manufacturing. As a business, we need continuity and predictability in our operations in China, and we sincerely hope that things will improve in the coming months.
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While China has loosened some coronavirus containment measures, such as reducing quarantine periods for visitors from abroad, it has not provided a timeline for a zero-Covid exit strategy.
As demand for air travel soars globally, the world's airline industry trade group, the International Air Transport Association (IATA), said earlier this month that China's recovery from the coronavirus pandemic remains "outlier".
"China continues to be the outlier as it pursues a zero-Covid strategy that keeps borders largely closed and causes wildly volatile volatility in its domestic market, down 46.4% in September from a year ago Is.
According to IATA Director General Willie Walsh, this is in stark contrast to the rest of Asia-Pacific, where international traffic grew by 464.8 percent compared to the same period last year, despite China's poor performance.
However, despite the country's slow recovery in air travel demand, Rolls-Royce has formed a joint venture with China's top airline Air China to open a new maintenance, repair and overhaul facility in Beijing.
The Trent 700, Trent XWB-84, and Trent 1000 engines for widebody passenger jets will be serviced by the joint venture, known as Beijing Aero Engine Services Company. All three types of engines are present in the Air China fleet.
Although state media in China reported in September that the project was valued at 2.61 billion yuan (US$369 million), Rolls-Royce did not disclose the investment amount.
According to MacCormac, the joint venture is a "long-term investment" for the aerospace company and "one of the strategic responses" to meet the growing demand for engine maintenance in the world over the next 10 to 15 years. Which will originate in China.
Minimize overseas transport of engines for aviation maintenance, repair and overhaul activity, he said, in order to support our sustainability goals and align growth in the region with regional potential for customer proximity.
To that end, the company's joint venture with Air China in Beijing is being built to manage 250 "shop visits" annually by the mid-2030s, according to McCormack. Such trips often require engine maintenance.
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Beijing Aero Engine Services Co.'s total employee count is estimated to be 800 when it reaches capacity, he continued.