Private Sector to Repair and Maintain ROC Military Aircraft

Taiwan's Ministry of National Defense (MND) will contract over NT$2 billion (US$62 million at NT$32.2:US$1) worth of military aircraft repair and maintenance work to the private sector this year, and the annual value of such work is expected to surpass NT$10 billion (US$310 million) by 2007. That year, the outsourcing will include the advanced Indigenous Defense Fighter (IDF) as well as F-16 and Mirage-2000 jet fighters.

This new policy has attracted at least four domestic companies to set up strategic alliances or special task forces to vie for the business: Aerospace Industrial Development Corp. (AIDC, the island's biggest aerospace manufacturer), Air Asia Co. (a specialized aircraft repair and maintenance firm), EVA Airways, and China Airlines (CAL).

An AIDC official explains that the government has implemented the policy of outsourcing the repair and maintenance of military aircraft as a means of spurring the development of aerospace-related technologies in the private sector. He reports that the ROC. Air Force will have private companies help with the repair and maintenance of various aircraft and systems, including AT-3 and T34 trainer aircraft, transport aircraft and helicopters, and the avionics systems of some jet fighters.

Among the four interested companies, the AIDC official points out, Air Asia has been known for decades for its expertise in structural parts and components, EVA and CAL specialize in aircraft engines, and AIDC itself focuses on aerospace engineering and system integration. AIDC has set up a special task force to carry out in-house planning and work out alliances with EVA and China Airlines with the aim of jointly striving for contracts to repair military transport aircraft and helicopters.

An Air Asia official expresses confidence in its ability to handle the repair and maintenance of military aircraft. Indeed, it has a long history of work on such military aircraft as the Beech 1900 executive aircraft, T34C trainer, and UH-1H, UH-58D, and TH67 helicopters.

Evergreen Aviation Technologies Corp. (EGAT), the aircraft repair and maintenance arm of EVA Airways, reports that it has already won contracts to repair T700 army helicopters and expects more such business in the future. The company notes, however, that most of its equipment is for work on jet airliners, and that it hopes the government will also allow private concerns to help with the procurement of military parts and components.

The AIDC is currently negotiating with the MND for a project to upgrade the IDF's avionics systems. The upcoming second stage of the project will cover all of Taiwan's 125 ADFs and will be worth about NT$4 billion (US$124 million) to whoever wins the contract. The systems involved, says AIDC, are similar to those used in the U.S. Air Force's new Joint Strike Fighter (JSF) aircraft and include radar, fire-control systems, and in-cabin displays.