Maker of big planes eyes tie-ups with Airbus, GE

PUBLISHED : Wednesday, 02 April, 2008, 12:00am
UPDATED : Wednesday, 02 April, 2008, 12:00am

China Commercial Aircraft, the mainland's first manufacturer of large aircraft, is interested in partnering Airbus on plane design and General Electric for engine development, according to a source.

'China has strong bargaining power,' the source said yesterday. Not only does China make aircraft parts for Airbus and Boeing. Mainland carriers are planning to buy about 1,600 aircraft by 2020 for US$150 billion to US$180 billion.

Imported technology and experience would eventually help the mainland produce its own large aircraft, especially in engine development, the source said.

China Commercial Aircraft plans to incorporate later this month after having received government approval. It has registered capital of 19 billion yuan (HK$21.11 billion).

The central government would inject 6 billion yuan into the company, while the Shanghai government would pay up to 5 billion yuan, the Shanghai Securities Journal reported.

China Aviation Industry I (Avic I) and Avic II - which make smaller aircraft - would invest 4 billion yuan and 1 billion yuan, respectively. Baosteel, Chinalco and Sinochem Corp would split the remaining shares evenly, the report said.

Zhang Qingwei, minister of the Commission of Science, Technology and Industry for National Defence, will be named head of the aircraft company, according to the report.

'It is reasonable for the Shanghai government to be the second-largest shareholder as Shanghai will be the place for the final assembly of the big aircraft,' said Yuan Liben, an adviser to Avic I.

Aircraft factories in Shanghai make only civilian planes, while three other bases - Harbin, Shenyang and Xian - make both civilian and military planes.

'Shanghai is also a good place to showcase the commercial and market-oriented properties of this project,' Mr Yuan said. 'It is a good place for absorbing international technology, too.'

Beijing approved the big-aircraft project last year and plans to build the first model with 150 seats by 2020.