China's Sichuan Airlines and Hong Kong Aircraft Engineering (HAECO) are to establish a maintenance, repair and overhaul (MRO) centre in the Chinese city of Chengdu that will focus on Airbus aircraft work.

Hong Kong-listed HAECO says in a statement that an agreement was signed today to establish Taikoo Sichuan Aircraft Engineering Services at Chengdu, in the western Chinese province of Sichuan.

Sichuan Airlines will own 42% while HAECO will own 40%. HAECO's Xiamen-based subsidiary Taikoo (Xiamen) Aircraft Engineering will own 9% as will privately owned Chinese company Sichuan Haite High-Tech.

"The facility will provide comprehensive and competitively priced aircraft maintenance to our shareholder airlines and other aircraft operators in China, India and Southeast Asia," says HAECO deputy chairman and CEO PK Chan.

"With the efforts of all our partners and the support of the Sichuan provincial government, the facility will become one of the leading comprehensive aircraft maintenance centres in the region."

HAECO, which is controlled by Hong Kong's Cathay Pacific Airways and its parent Swire Pacific, says the new facility will be located at the northern end of Chengdu airport’s runway, covering an area of around 450 acres (182Ha).

It says it will eventually be able to accommodate four Airbus A340s and four Airbus A320s at one time, adding that it will be the first local-foreign joint venture in China specialising in Airbus maintenance.

Total investment is estimated at between 1 billion yuan ($146 million) and 1.2 billion yuan, and the first phase will include two one-bay narrowbody hangars costing around 150 million yuan. It is due to be ready for operation in the first half of 2010.