HONG KONG'S HAECO POSTS 20 PERCENT INCREASE IN PROFITS FOR YEAR

HONG KONG'S HAECO POSTS 20 PERCENT INCREASE IN PROFITS FOR YEAR

Despite loss of one lucrative maintenance contract, Hong Kong Aircraft Engineering Co. Ltd. reports after tax profit up 20 percent for the year through last Dec. 31 to HK$174 million (US$22 million) from HK$144 million.

The company, known as Haeco, is 25 percent held by Swire Pacific Ltd. and 25 percent by Cathay Pacific Airways Ltd., another Swire unit.It undertakes maintenance and repair for Cathay and other carriers and has seen business grow with a sharp increase in air traffic through Hong Kong.

In the year through December 1986, after tax profit was 25 percent ahead of the year earlier.

We are pleased that the (latest) figure is around 20 percent, said Haeco's chairman Peter Sutch. Bearing in mind that we lost Gulf Air, it's very encouraging.

Gulf Air transferred maintenance of 11 Lockheed L-1011 TriStars to Abu Dhabi, one of the group of Arabian Gulf countries that owns the carrier.

Mr. Sutch says Haeco more than made up for this because the aviation business has been quite buoyant. There's been more flying this year, so there's generally a higher level of work for us.

Cathay Pacific acquired an additional TriStar during the financial year and is adding three Boeing 747s to its fleet. Against that, United Airlines, another contract customer, plans to dispose of six TriStars this year, which will cut the workload.

Additional business is expected to come from smaller airlines in developing countries without the sophisticated facilities needed to maintain or repair modern aircraft, Mr. Sutch says.

Haeco says it sells about 4.5 million man-hours a year of contract maintenance, repair and overhaul work, more than any similar company in the world. Other clients include British Airways, Canadian Pacific, Flying Tigers and China's CAAC.

The company has a 45 percent stake in Thompson Aircraft Tire Co. (Asia) with Thompson Corp. of the United States and Bridgestone of Japan. It also holds 60 percent of a joint-venture trading company with China's Ministry of Aviation Industry.