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Globalization of China’s Commercial Aircraft Industry. Dr. David Pritchard. February 2008. China plans to realize its "large aircraft" dream by the year 2015. "Large aircraft" refer to large transportation planes with more than 150 seats
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Globalization of China’s Commercial Aircraft Industry Dr. David Pritchard February 2008
China plans to realize its "large aircraft" dream by the year 2015 • "Large aircraft" refer to large transportation planes with more than 150 seats • “State Council, China's cabinet, has given the go-ahead to set up a company to build the aircraft” • “The State Council meeting believes that building large aircraft is an important, strategic policy of the Communist Party and State Council, and it has also been the wish of the entire nation for many years," • "Our country has been developing the aviation industry for 50 years, and already has the technical and material base to develop large aircraft”
Boeing 20-year forecast for China • $340 billion • 3,400 new planes • China to grow fivefold • By 2026, China will be larger than today’s North American market
Airbus 20-year forecast for China • China will need over 3,000 passenger and cargo airplanes • 2,050 single-aisle airplanes • 600 small twin-aisle airplanes • over 200 medium twin-aisle airplane • 180 large airplanes
CAAC is drafting the 11th Five-Year Plan and 2020 Vision for the aviation industry • Expected annual growth rate will be 14% • China expects to have 186 airports • 3 national hubs • 7 regional hubs • 24 medium hubs • 28 medium airports • 124 small-size airports • Total investment will be $17.7 billion
China will Develop it’s Commercial Aircraft Manufacturing Capability The same way as they do with their military aircraft by co-production and licenses
ARJ-21 Market Outlook • Two versions 78 and 105 seats • 500 ARJ-21s in 20 years-35 ordered • Initially target domestic market • Selling price is 10% to 15% less expensive than western regional jets • Avoids 23% import tax on regional jets
ARJ-21 Features • Chinese design (with western design software-Catia) • Western engines, flight controls and avionics • US FAA certification
ARJ-21 Production Sites“Centers of Excellence” • Shanghai Aviation-final assembly and stabilizer section • Chendgu Aircraft Factory- nose assembly • Xian Aircraft -wing assembly and fuselage • Shenyang Aircraft – tail section
China’s Expanding Market-2007 • China's AVIC I Commercial Aircraft (ACAC) plans to establish a representative office in the USA, and later a subsidiary, to spearhead its sales push into that market • Chinese aircraft maker Aviation Industry Corporation (AVIC I) intends to seek US and European certification for all its aircraft in future so that China can increase its ability to export aircraft overseas • AVIC I Commercial Aircraft (ACAC) has secured a landmark first export deal for the ARJ21 regional jet from Lao Airlines for two aircraft.
C Series Geopolitical Considerations • Launch orders for technology transfer • Bombardier lacks the capital to build the C Series Aircraft • Joint venture between Bombardier and AVIC 1 (Shenyang and Chengdu factories) • Complete fuselage to be build in China
Empennage Center Fuselage NoseFuselage Doors Pylon Wing Powerplant LandingGear C Series-Risk Sharing Partners/Suppliers will design and manufacture the work packages
Bombardier steps up transfer of work to Mexico and China • Mexican-made part will be a Challenger 850 fuselage, formerly made by its Belfast site in the UK • Bombardier is also moving large parts of its major aerospace subassembly work away from Mitsubishi Heavy Industries (MHI) in Japan, and transferring it either to Mexico or to China's Shenyang Aircraft (SAC)
Bombardier and ChinaLong-term Strategic Cooperation Agreement • Bombardier is to invest $100 million into China Aviation Industry Corp I's (AVIC I) ARJ21-900 project and provide technical assistance in developing the aircraft. The two companies also firmed up plans to co-operate in the 90- to 149-seat civil aircraft market, including the Bombardier C Series. • AVIC I plans to invest $400 million US for research and development, construction of new facilities and equipment for the C Series aircraft program, should it be launched. • AVIC1 and Bombardier will jointly design a new fuselage and interior for the ARJ21-900 and the aircraft promises to include more composites
ERJ Assembly Line-China • Joint venture with Embraer and Harbin Aircraft Plant ($40 million joint investment) • ERJ’s with 40-50 seats • Capacity for assembling 24 aircraft a year • Avoids the 23% import tax levied on regional aircraft
Airbus in China • Assembly factory of A320 series of airplanes is established in Tianjin China.-4 a month by 2011 • By 2009 will able to manufacture the complete wing structure of A320 series of airplanes • Participation of the project in designing and manufacturing 5 percent airplane body of A350 • China will play a more important role in the global strategy of Airbus Corporation
Airbus assisting China’s Technology Development • The President of Airbus (China) Company stated, "the assembly line is one of the core abilities of the airplane manufacturers; the establishment of assembly line in China will enable the aviation industry in China to be involved in the core ability and key technologies. The assembly line in Tianjin will exercise the huge and positive influence on the aviation industry in China and also stimulate the other suppliers in this industry to enlarge their businesses in China
Contact Information Pravco Dr. David Pritchard 210 Sagewood Terrace Williamsville, NY 14221 Telephone/fax 716-632-5657 (USA) davidjpritchard@roadrunner.com www.pravco.com