China aircraft maker sells 5 jets to GE

[Naveed Yaseen]

ZHUHAI: China’s main aircraft maker has sealed an agreement worth up to $750 million to sell five jets, with an option for 20 more, to General Electric’s aircraft leasing arm, in its first major overseas deal for the homegrown plane.

The government-backed Commercial Aircraft Corporation of China (COMAC) signed an official agreement with GE Commercial Aviation Services on the Chinese-designed ARJ21 civilian jets on Tuesday at the biennial Zhuhai airshow in southern China.

“It is the first time that an aircraft that is researched and developed by China is sold to the US, such a high-end market,” said Zhang Qingwei, the Chairman of COMAC. “Also, during the process of implementing this contract we will be able to greatly improve ourselves in terms of mass production, customer service and industry awareness.”

GE Commercial had signed a preliminary agreement in March with COMAC to buy five 78-seat ARJ21 jets fitted with GE engines, with an option to buy another 20 at an unspecified date.

“The options are not going to be exercised at this point,” Andre Robert, head of marketing for GE Aviation, told Reuters.

Margaret Lee, GE Aviation’s GM, said the aircraft would cost around $30 million each and she expected the ARJ21 to obtain flight certification by US and Chinese aviation authorities by 2010, with the planes to be delivered soon afterwards. “We have confidence and belief in this airplane,” she said, without specifying where these aircraft might be used or leased.

The airshow also saw Bank of China’s Singapore-based aviation leasing arm place an order for 20 Airbus A320-aircraft, including some that were previously ordered by a carrier that failed. The Airbus orders were largely those taken over from an existing order for Airbus aircraft placed by Skybus Airlines Inc., a low-cost US carrier that shut its operations in April, a BOC executive told Reuters in an email.

Global ambition: China’s bold dream to develop its own jetliner industry comes as the aviation industry undergoes a severe downturn partly from the bleak global economic outlook.

The International Air Transport Association (IATA) reported an “alarming” drop in global passenger traffic growth for September of 2.9 percent, the first decline since the SARS epidemic in 2003.

With an aim to eventually compete with industry giants Boeing and Airbus in the global market, COMAC already has more than 100 orders for the ARJ21 jet, unveiled last December and due for commercial deliveries from the third quarter of 2009.

But most of the orders are from domestic carriers. Some analysts said despite the GE deal, the economic downturn could make it more difficult for COMAC to ink vital new foreign orders.

“The problem is although China’s appetite for aircraft is huge, it still doesn’t satisfy them starting their own manufacturing business simply for themselves,” said Stephen Miller, the head of aviation consultancy the Trinity Group in Hong Kong. They’ve really got to sell outside China because they need the numbers.”

Other participants at the biennial Zhuhai Airshow, China’s largest aviation event with more than 60 aircraft, helicopters, military jets and the Shenzhou VII space module on display, shrugged off the competitive threat posed by China.

“We are totally in favour of what is happening here in China. It is only normal that a country like China would want to develop its own aircraft manufacturing industry,” Laurence Barron, President of Airbus China, told reporters.

Incorporated in Shanghai earlier this year by the merger of China’s two state aircraft makers, AVIC I and AVIC II, COMAC, also known by the initials CACC, became the country’s first maker of large-sized passenger aircraft.

General Electric and Parker Hannifin Corp are among the companies that supply parts for the ARJ21 jet. reuters

http://www.dailytimes.com.pk/default.asp...008_pg5_43