Aircraft market in China
Today China is the second largest aircraft market of the world, and it should surpass the US before 2032. So many aircraft companies in the world try to take advantage of this market, knowing China doesn’t produce a lot of aircraft itself. This market represents billions of dollars and the biggest companies are constantly having a war to win this market. The 40 airlines companies, Air China, China Eastern and China Southern being the biggest, buy every year around 200 aircrafts, which represents 1/8 of the world’s demand. So what are the companies selling and working with China?
Here are the major ones:
Airbus is a French aircraft company based in Blagnac, South France, owned by EADS (European Aeronautic Defence and Space company), which will be called Airbus Group from January 2014. The company produces more than half of the aircraft of the world, and its main competitor is Boeing. It produces civil Aircraft in the world, but especially in Europe, but it has a subsidiary called Airbus Military, based in Spain which produces military Aircraft such as the A400M.
The cooperation between Airbus and China has been going on for a long time. Airbus made his first delivery to China in 1985 with an A310 sold to China Eastern. The company had then in May 2013 more than 900 aircrafts flying in the country.
But Airbus now also produces aircraft in the country. The A320 final assembly line in Tianjin was the first one outside Europe, when they started the cooperation in 2008, with a joint venture between Airbus and the Tianjin Free Trade Zone and AVIC (China Aviation Industry Corporation). Since then, 126 aircraft coming from this cooperation had been sold in May 2013.
But in September 2013 Qingdao Airlines signed a contract in order to buy 23 A 320 for 2,26 billion dollars, and Zhejiang Loong Airlines signed for 20 A320, for 1,91 billion dollars.
Airbus has a strong cooperation in China, and has also for example training centers and engineering centers in China were engineers are trained. Moreover the company buys a lot of aircraft pieces in China, in order to build all its aircraft.
Boeing is an American company created in 1916. It’s one of the biggest aeronautics and aerospace manufacturer in the world. The company’s headquarters are located in Chicago. It produces civil aircraft, but also military aircraft, helicopters, satellites and rockets
Boeing’s cooperation with China started in 1972, when Nixon decided to make a visit in the country.
Today Boeing is one of the biggest seller to China: more than 50% of jets flying in the country are made by the company.
In March 2013, Boeing delivered its 1,000th airplane to the country, which means that China is now the second market of the company after the US. And it is not over because they expect to deliver 170 airplanes to China this year, increasing the sales of 60% compared to last year.
Boeing also buys aircraft’s pieces to China for its 7000 airplanes flying in the world.
Bombardier Aeronautics is a subsidiary of the Canadian Bombardier group, and is the third larger aeronautics manufacturer in the world after Boeing and Airbus.
The company delivered its first aircraft to China, the Global 5000 in July 2009. And now it sells aircraft to 43 airlines companies including Shanghai airlines, China United Airlines and China Eastern Yunnan.
It has also cooperated with Chinese companies, and some of its aircraft have been made in China for 25 years.
Recently Bombardier signed some cooperation agreements with Chinese companies in order to build the Q400 and CSeries aircraft.
Moreover the company just opened a new office in Shanghai in order to support its activities in China, where the employees work also with the COMAC (Commercial Aircraft Corporation of China)
Embraer (Empresa Brasileira de Aeronáutica) is a Brazilian aircraft manufacturer specialized in small and middle size aircrafts. Its headquarters are in Sao Paulo but it has several subsidiaries, and especially one in China in Harbin.
It has been delivering Aircraft to China for several years and had 156 orders from the country in September 2012, and had delivered 125 aircraft.
Recently the company made a joint venture with AVIC (Aviation Industry Corporation of China), in order to build the Legacy 600 and Legacy 650 planes, which are private jets. The first Legacy 650 should be delivered this year.
The brand is especially well known in China for having made a huge buzz at the last Singapore Airshow, taking the big Star Jackie Chan as a brand ambassador. In fact Jackie Chan bought a Legacy 650, which was customized for him with a red and yellow dragon logo and his name written on the jet.
You can see the presentation of the jet made by the star in this video:
This buzz was successful, because diffused by many China media, and the result was that 13 Chinese millionaires ordered the same jet.
The Commercial Aircraft Corporation of China Ltd. (COMAC) is a state-owned company created in 2008. The headquarters are in Shanghai and the company is supported by the Chinese government, as well as big Chinese companies such as Chinalco and Baosteel.
The main aircraft of the company sold are the ARJ-21 and the C919. Already 240 ARJ-21 have been sold until today to Chinese Airlines, but also a Laotian carrier and General Electric.
The C919 was made to compete with Boeing 737 and Airbus A320. The aircraft is totally made in China, and should be available by 2016. Already 400 units have been ordered, according to COMAC.
But the company is also now manufacturing new big aircraft with respectively 300 and 400 seats: the C929 and the C939 in order to compete with the biggest aircraft of Airbu and Boeing.
So with the new manufacturing of Chinese-made Aircraft of COMAC, we can wonder if this state-owned Chinese company will overtake the market, now almost monopolized by Airbus, Boeing and Embraer. Especially because the Chinese market is full of opportunities, China being a big buyer of airplanes.
But it seems that the experts don’t expect China to have a company as big as the western ones before 10 or 20 years.
However, the demand will continue to grow in China, and the country is expected to buy 6000 aircraft in the next 20 years, which represent a 780 billion dollars market. The country should also become one of the biggest buyers in the Asia-Pacific region, representing 40% of the sales there.
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