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Business Jet Production in China

With Cirrus now in Chinese ownership and Embraer looking to begin Legacy production in China- both AVIC and COMAC appear to be looking towards Business Aviation too… so what should the corporate aviation world be thinking?

AvBuyer   |   1st September 2011
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How long will it be before business jets are built in China?

By Steve Nichols

With Cirrus now in Chinese ownership and Embraer looking to begin Legacy production in China- both AVIC and COMAC appear to be looking towards Business Aviation too… so what should the corporate aviation world be thinking?

When Michael O’Leary- the controversial leader of Irish low-cost airline Ryanair- announced at this year’s Paris Air Show that he was in discussions with Chinese company COMAC to acquire “more than 200” C919 narrow-body airliners- the commercial aviation world sat up and took notice.

But was O’Leary playing one of his infamous public relations games? Was he really serious- and what impact (if any) could this have on Business Aviation?

It might not just be low-cost airline passengers who are soon going to be flying around the globe on China-built (and maybe Chinese designed) aircraft. The country is rapidly making its mark in Business Aviation and there are many who believe that the country has barely begun with its movement into business aircraft production.

The world’s largest piston aircraft maker – Cirrus – has completed its controversial merger with China's CAIGA- a subsidiary of AVIC. Many believe this will be the mechanism by which Cirrus (previously under Bahraini ownership) will be able to finance and speed-up product range development – specifically for the SF50 Vision personal jet it is developing - as well as increasing the pace of pre-recession-planned global expansion.

Cirrus will now accelerate development of its flagship SF50 Vision personal jet for which it has more than 430 orders. 'The Vision is our key focus-' outlines a Cirrus spokesman. 'We hope to bring it to market within three years.'

Even though the use of such aircraft is limited in China and most of its airports lack facilities to handle them- the country is considered one of the world's most promising markets for growth. China's Civil Aviation Administration recently proposed relaxing restrictions for its low-altitude airspace over the coming five to 10 years- opening up the possibility of a huge boost for both light aviation and business jets.

Aerospace giant Embraer has also been feeling the Chinese business jet market over the past few years. Now that the agreement that built ERJ-145s for Hainan Airlines has come to an end- the plant -run by a JV and called Harbin Embraer -will (in conjunction with AVIC) be utilised to build the Legacy 600/650- targeted mainly at the Chinese market.


OEM Stimulants in China
Late last year- Chinese authorities announced plans to open parts of the country's low-altitude airspace to private aircraft- helping to promote the growth of business and general aviation.

Reports also indicate that China aims to introduce a network of general aviation infrastructure and services (FBOs and MROs) in the country by 2020. Some would say that this is long overdue- but all agree that with a degree of planning for the future expansion in motion- the demand is pent-up like a cork in a Champagne bottle- ready to explode once released.

Popular models in the Chinese market include the Gulfstream G450 and G550- the Bombardier Global family of aircraft and Dassault’s Falcon 7X.

Bombardier released a market forecast in 2010 estimating that 600 business aircraft will be delivered to China up until 2019- taking the total fleet size to around 700 in number. Firestone Management Group outlined earlier in the year that there were 116 business aircraft registered in China (including Hong Kong and Macau). Growing affluence in China- as well as greater knowledge of business aircraft- seems likely to grow this number significantly.

Embracing a niche market means there are a number of holes- including system services and management policies that must be filled in the near future- says Wu Tongshui- president of the Civil Aviation University of China- speaking at this year’s SIBAS airshow. The Business Aviation industry's service chain should include parking spots for jets- maintenance shops and components stores- Tongshui says - at this time- only a limited number of cities in China like Shenzhen- Shanghai and Beijing can provide routine maintenance service for business jets.

Dassault Falcon’s VP for international sales- Jean-Michel Jacob- describes the market in China to be ‘booming’. “Activity here is growing fast-” he said. “We had an incredible 2010- and expect to have an extraordinary 2011.”

Dassault delivered three jets in China in 2010- and is due to make at least seven deliveries in 2011.Bombardier opened a regional support office and parts depot in Hong Kong in the first quarter of 2011- while Hong Kong-based TAG Aviation Asia (which has seen a 20% increase in enquiries over the last six months)now manages a fleet of 20 aircraft- up from 13 in mid-2010.

As the Business Aviation market in China begins to grow- aircraft manufacturers have reported high interest levels- particularly in the bigger-capacity business jets. 'China wants the bigger aircraft that can carry more people- and fly on regional routes such as between Beijing- Jakarta and Mumbai-' continued Jacob. 'Potential buyers here have the capacity to buy all sizes of aircraft- and companies that can afford it usually decide to buy the big jets.'

On the other hand- Hawker Beechcraft says that the Chinese have learned that one does not need an intercontinental jet aircraft costing $45 million to fly from Beijing to Shenzhen. Instead- they can do the same flight in the same comfort in a jet costing a third of the price. A Hawker Beechcraft spokesperson added- 'As people become more educated regarding the benefits of private aircraft ownership- we see more aircraft being purchased that fit their specific mission needs.'

Cessna agrees. 'Ultimately this demand will filter down to midsize and smaller business jets- so that although the business jet market in mainland China is still relatively small right now- market potential in this $4-5 trillion GDP market is substantial in the medium- to long-term-' says Cessna’s Vice President for international sales- Trevor Esling.


AVIC Actively Looking For Partnerships
Cessna is in talks with Aviation Industry Corporation (AVIC) of China about collaborating on a business jet. AVIC issued a request for information and Cessna responded- confirmed a Cessna spokesman. “At this point discussions are exploratory-” he added.

Trevor Esling told the South China Morning Post recently that the preliminary talks were around jointly designing and producing the jets. Currently- Cessna has 27 Citation aircraft in operation in mainland China. By comparison- Bombardier Aerospace and Hawker Beechcraft each have12 and Dassault five. Cessna also has 165 single-engine aircraft and 13 Caravan turboprops operating in China. Cessna’s light sport aircraft -the two-seat Skycatcher -is actually built in China by Shenyang Aviation Industry.

Ultimately AVIC is in discussions with many of the business jet manufacturers- including Hawker Beechcraft (which also responded to AVIC’s request for information).Hawker Beechcraft Chief Executive Officer Bill Boisture said recently that he has also been in discussions about the potential of a venture for final assembly of one of its airframes for the emerging Chinese market.

The first Airbus final assembly line to operate outside of Europe (located in Tianjin) officially opened on 28 September 2008. This production site for the A320 aircraft family is a joint venture between Airbus and a Chinese consortium of Tianjin Free Trade Zone (TJFTZ) and AVIC.

In May 2009- the facility marked a milestone when the Chinese final assembly line's first jetliner - an A320 - completed its maiden flight- taking off from Tianjin International Airport. This same A320 was delivered on 23 June 2009 to Dragon Aviation Leasing for operation by Chengu-based carrier Sichuan Airlines- marking the first customer handover of an Airbus jetliner produced outside Europe.

During the first five months of 2010- Airbus delivered a total of 10 A320 jetliners assembled in Tianjin – demonstrating that this facility’s production was on track. Airbus handed over the 50th jetliner assembled in Tianjin to Shanghai-based Juneyao Airlines during June 2011 – less than two years after delivery of the first aircraft produced at this Chinese final assembly line.

How long will it be before Chinese-designed and built business jets are flying nationally and internationally? There’s no answer to that question right now - but if the pace of progress is accelerating- it’s unlikely to be as long as some may think.

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