Cessna in talks with China's Avic
Cessna, the leading light and mid-size business jet manufacturer, is in talks with Aviation Industry Corporation of China (Avic) to jointly develop the mainland market, as it bets an increasing number of buyers will see private jets as more than a high-altitude sports car.
'The mainland is still an uneducated market,' said Trevor Esling, Cessna's vice president for international sales. 'Most of the purchases are trophy-buying.'
Although Cessna produces some of the best high-performance jets in the world, Cessna has failed to appeal to affluent buyers on the mainland who are looking for a 'Porsche' instead of a 'Honda'.
There are approximately 120 corporate jets registered on the mainland, with most private jet sales spilt between Gulfstream and Bombardier, which sell jets with larger fuselages that allow owners to add more luxury facilities on board. Cessna jets are often priced more affordably compared with rival jets.
Esling said he believed the demand for small and mid-sized private jets would increase when mainland buyers realise business jets have value beyond being a luxury vehicle. 'If a US$12 million private jet can carry you from Beijing to Shenzhen or Hong Kong, why bother to buy a jet for US$60 million?' he asked.
He said talks with Avic to jointly design and produce private jets were at the preliminary stage, and it is believed that competitors - including Gulfstream, Bombardier and Embraer - were in talks with Avic as they eye the lucrative and undeveloped mainland market.
Beijing is pressing hard to close the gap with western rivals in its aircraft manufacturing industry. As corporate jets are technologically more advanced than commercial jets, Chinese manufacturers need technological transference from international jet makers.
'The PLA would be one big potential client for us,' Esling said. However, Cessna cannot sell planes to the People's Liberation Army because the American government imposed sanctions on exports of high-technology products to the mainland military.
Nevertheless, the joint venture with mainland partners might open a window for American jet manufacturers to sell their products to PLA, an industry veteran said. 'But it still depends on the negotiations between the two governments,' the person said. Cessna has already teamed up with Shenyang Aviation Industry Corporation to produce a two-seat trainer in the province of Liaoning. The production line of the Skycatcher in Shenyang is scheduled to make 100 aircraft this year.
The Kansas-based aircraft maker, which started making small aircraft more than 80 years ago, was the first foreign company to sell private jets to the mainland.
Two Citation jets, which were delivered to the Chinese Academy of Science in 1982, are still in use. They still get spare parts and maintenance from Cessna even though the aircraft model is no longer in production. Cessna's aircraft have been well received by government departments, such as the Civil Aviation Administration of China. The government owns about 10 of the 30 Cessna corporate jets on the mainland.