Posted: January 31, 2013 |  AUTHOR: KEN FOX | CONTACT ME

 

China plans to build 56 new airports, relocate 16 and renovate 91 others over the next five years. The planned investment is worth about $68.5 billion U.S. dollars, and will yield a total of 231 airports in China by 2015, according to the Civil Aviation Administration of China. The new airports will mainly be located in the central and western parts of the country. There are currently 175 commercial airports in China.

Currently, China sources its commercial aircraft from North America and Europe. However, China plans on developing its own commercial aircraft and building additional airports due to demand from higher income earning consumers, who are starting to prefer travel by air.

China claims it will need about 5,000 commercial planes over the next twenty years (Source: Xinhua News Agency). Chinese air lines carried 292 million domestic passengers in 2011, up 9.2% from 2010. The Commercial Aircraft Corporation of China (COMAC) forecasts China will need 4,273 “large” passenger jets from now until 2031.

Shanghai based COMAC is developing two Chinese made commercial airplanes, a regional jet and a larger jet to compete against Boeing and Airbus.

COMAC ARJ 21-Regional Jet
The Xianfeng, which means Soaring Phoenix, is a twin-engine regional jet plane. Various models will hold from 70-95 passengers. The plane was to be delivered in late 2011 but has faced numerous delays due to not meeting various tests and ratings in order to obtain certification. COMAC now claims the plane should be delivered to customers, the first being Chengdu Airlines, by the end of 2013. COMAC has been accused of copying the MD-80 design for this aircraft. There had been an earlier MD-90 aircraft licensed to China by the McDonnell Douglas Corporation, which remained n China after the contract expired.

The Chinese government refers to the ARJ 21 plane as “designed by Chinese.” Some of the Chinese manufacturers involved in the development, design and construction of this plane include:
-Chengdu Aircraft Industry Group-construction of nose
-Xian Aircraft Co.-construction of the wings and fuselage
-Shanghai Aircraft Co.- final assembly
Other sources cite the following as international partners for developing the ARJ21 program (partial listing):
[one_third]

U.S. Partners

Alcoa

B/E Aerospace
Eaton Corp
Honeywell
Parker Aerospace
Rockwell Collins
Zodiac Air Cruises
[/one_third]
[two_third_last]

Contribution

Advanced alloys for airframes, wing and fuselage, floor beams, seat tracks, fasteners and structural components
Oxygen equipment
Flight deck instrument panel and lighting controls
Flight control system
Fuel, hydraulic and electrical flight controls
Integrated avionics systems
Emergency evacuation system
[/two_third_last]

 

Non U.S. Partnerspartial listing

-Antonov ASTC (Ukraine) Wing design, structural strength analysis
-Fisher (Austria) Cockpit, cabin interior, kitchens, restrooms
-Liebherr Aerospace Landing-gear braking systems
(Germany)
-Safran Sagem (France) Flight deck control suite
-Zodiac Evac-Vacuum Water/waste Systems (Shanghai)
-Zodiac Sicma Aero (France) crew seating

COMAC C919
The COMAC C919 represents a family of medium range jets with seating of 158-174, depending on the model built. It will be the largest commercial airliner to be built in China since the defunct Shanghai Y-10. The C919 is planned to compete with the Boeing 737 and Airbus 320 aircraft. The dimensions of the C919 are similar to the Airbus A320. The C919 has a claimed range of 3,450 miles, and a maximum flying altitude of 39,800 feet.

Chinese airlines will apparently be required to buy at least some C919s. Fifty-five C919 planes were ordered at the 2010 Zhuhai (China) Air show (held in mid November 2012). The initial customers include: China Eastern Airlines, Air China, Hainan Airlines, China Southern Airlines, CDB Leasing Co. and GE Capital Aviation Services. The planes will utilize GE engines. The C919 has a scheduled launch in 2016.

Like the ARJ 21, international partners will be used to source major parts and components. Some of these include:

U.S. Partners

-Eaton Corp. Pipelines for fuel and hydraulics systems
-General Electric Propulsion, avionics, flight deck recording
-Goodrich Corp. Exterior lighting, landing gear
-Hamilton Sundstrand Electric power generation and distribution, cockpit pilot
controls
-Honeywell Internat’l Flight control systems, APU, wheels and tires, braking
System, inertial reference and air data systems
-Kidde Aerospace Fire and overheat protection systems
-Parker Aerospace Fuel and hydraulic systems
-Rockwell Collins Communication and navigation systems

Non-U.S. Partners

Fisher (Austria) Cockpit, cabin interior, kitchens, restrooms
Liebherr (France) Air management system
Liebherr (Germany) Undercarriage system

COMAC claims it will use its experience from building the ARJ21 regional jet to optimize building the C919.

Many of the U.S. major aircraft, engine and component manufacturers have joint ventures with Chinese firms. Some of these include:
Boeing; 1. Has a 9% interest in Taikoo Aircraft Engineering Co in Xiamen, an aircraft maintenance, conversion and repair facility. Employees: 5,000
2. Has a 60% interest in Boeing Shanghai Aviation Service Co. , a joint venture with Shanghai Airlines (15%), Shanghai Airport Authority (25%)
3. Bought out joint venture partner Hexcel and invested in Boeing Tianjin Composites and a joint venture of Boeing and AVIC (Aviation Industry Corp. of China) for secondary composite structures and interior parts

Pratt & 1. 78.3% interest in Chengdu Aerotech Manufacturing, a joint venture
Whitney with a Chinese consortium led by the Chengdu Engine Group
2. 20% interest in Xi’an Aro Engine Group
3. 49% interest in the Shanghai Pratt & Whitney Aircraft Engine Maintenance Co, and engine overhaul facility with Shanghai based China Eastern Airlines

Experts say Chinese flyers prefer to fly tried and true, reliable U.S. and European airplanes. However, if and when the C919 proves its safety and reliability these planes will be better accepted by the public and airlines.

Increased international flights to China are inevitable. International flights to the interior of China will specifically increase. One example is the recently announced British Airways non-stop service from London’s Heathrow Airport to Chengdu, China. These flights will start on September 22, 2013, and fly three times a week.

China Aims to Revitalize the Eastern Airlines Brand Name

The Chinese state aircraft manufacturer, COMAC, made a surprise announcement at the Zhuhai air show (November 2012). It announced the planned purchase of the Eastern Airlines name by investors. Eastern Airlines went bankrupt in 1991. The deal has not been finalized and details are not available. Some former Eastern Airline employees are involved. Plans call for the airline to be based in Florida (USA) and fly initially to destinations in Latin or South America. The investors are apparently looking for aircraft, with rumors saying the airline will start in late 2013. Eastern used to be the largest airline to serve the Latin American market. Plans include the revitalized Eastern Airlines to fly COMAC jets in the U.S., when approved and available.

Final Comments
This blog entry does not touch on the Chinese military aircraft business, which is also growing. China commissioned its first aircraft carrier in August 2011. It plans to create a carrier group in about ten years. The aircraft carrier is a more a symbolic gesture than serving any practical significance, other than training. The point is, the total Chinese aircraft industry is booming. Initially, North American companies will benefit from China sourcing major parts, components and services for these aircraft. However, over time I expect China to try to manufacture all needed parts, except possibly engines.

Regarding the Chinese ARJ21, the Chinese market for regional jets is currently small. However, if they follow in the footsteps of Brazil’s Embraer or Canada’s Bombardier, China’s COMAC could become a player in the growing, global regional jet market, where Boeing is absent.

Resurrecting Eastern Airlines may be a smart and welcome move, given the reduced number of airlines operating in the U.S. due to consolidation. The question will be, how reliable and safe are Chinese built jet planes, and will U.S. passengers fly them?

Resources:
1. China Needs 4,960 Planes by 2031, Space Daily, November 13, 2012
2. Ready for Takeoff: China’s Advancing Aerospace Industry, Rand Corporation, National Security Research Division
3. China to boost Aviation Industry in next 5 Years, CiEnglish.com, March 3, 2011
4. China Sells Jets, Dabbles in Easter Air Revival, www.reuters.com, November 13, 2012

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©2017, The Global Galaxy blog is produced by The Soundings Group, LLC, Charleston, South Carolina, USA, www.thesoundingsgroup.com. The company is an international business consulting firm, specializing in new market assessments, market entry strategies and marketing guidance. The scope of Global Galaxy is to cover timely international trends, issues and business building ideas. Its purpose is to educate, inform and stimulate thinking for business opportunity analyses.

 

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