Globalization of Chinas Commercial Aircraft Industry

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Globalization of Chinas Commercial Aircraft
Industry
Dr. David Pritchard
February 2008
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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

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Boeing 20-year forecast for China

• 340 billion
• 3,400 new planes
• China to grow fivefold
• By 2026, China will be larger than todays North
  American market

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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

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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

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China will Develop its Commercial Aircraft
Manufacturing Capability

• The same way as they do with their military
  aircraft by co-production and licenses

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China Aircraft Offset Programs
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ARJ-21 China Regional Jet
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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

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ARJ-21 Features

• Chinese design (with western design
  software-Catia)
• Western engines, flight controls and avionics
• US FAA certification

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ARJ-21 Interior

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ARJ-21 Cockpit Configuration

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ARJ-21 Production SitesCenters of Excellence

• Shanghai Aviation-final assembly and stabilizer
  section
• Chendgu Aircraft Factory- nose assembly
• Xian Aircraft -wing assembly and fuselage
• Shenyang Aircraft tail section

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ARJ 21 Manual Airframe Production First
Production Lots
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ARJ21 Fuselage Panels
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ARJ 21 Fuselage Panel Assembly
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ARJ 21 Wing Box Assembly
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ARJ 21 Mating Fuselage
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ARJ 21 Final Assembly-Shanghai
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ARJ 21 Final Assembly
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Chinas 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.

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Bombardier C Series
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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

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C Series-Risk Sharing Partners/Suppliers will
design and manufacture the work packages
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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)

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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

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Embraer 140s Co-production

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ERJ Assembly Line-China

• Joint venture with Embraer and Harbin Aircraft
  Plant (40 million joint investment)
• ERJs with 40-50 seats
• Capacity for assembling 24 aircraft a year
• Avoids the 23 import tax levied on regional
  aircraft

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Airbus and China JV for A320
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A320 Final Assembly in China
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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

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Airbus assisting Chinas 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

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Contact Information
Pravco Dr. David Pritchard 210 Sagewood
Terrace Williamsville, NY 14221 Telephone/fax
716-632-5657 (USA) davidjpritchard_at_roadrunner.com
www.pravco.com