Virgin Australia has agreed to buy scrap aircraft parts and components from Aeros, a South African firm.
Virgin Australia said it was pleased to secure Aeros’ offer of a 5-year term of ownership of the company.
The deal includes the company’s current fleet of four aircraft engines and a number of related aircraft components.
“This agreement will ensure Virgin Australia is able to continue to invest in its aviation infrastructure and meet the needs of its customers and partners,” Virgin Australia chief executive Brian Gulliver said.
ROBERT BECK/FAIRFAX NZ The Aeros plant is located on the southern outskirts of Cape Town.
Mr Gullivers plans to buy the scrap aircraft and related components from the company, which has a manufacturing plant in South Africa and is currently owned by Virgin Australia.
Aeros is a joint venture between the South African government and Aeros SA.
Aviation experts say the agreement could open the door for future deals.
One expert said it might not be a long-term deal for the South Africans.
There’s been a lot of talk in the South Africa business community about the fact that this is a very competitive market and that you’re not going to see large companies that have significant manufacturing capacity and scale,” he said.”
It’s just going to become a smaller and smaller market over time.
This is just one piece of that puzzle.
“The scrap sale could be made possible by Virgin’s recent decision to divest itself of a major aerospace business.
In December, Virgin announced plans to sell its aerospace business, Aeros Aero, to German aerospace firm Airbus.
After nearly 40 years in business, the company has struggled to find a buyer.
At the time, the deal was expected to be worth about $US1.6 billion ($1.9 billion).
Aeros Aero is the second South African company to be acquired by Virgin.
Its former partner, the South Korean Aerospace Corporation, is in the process of buying its aerospace operations.
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