Business

China will sell 25 jets to a US company in a “breakthrough” deal that marks the country’s entry into the big-plane market dominated by European and US players. The Commercial Aircraft Corporation of China (CACC), which developed the ARJ21-700 regional aircraft independently, will sign a 5-billion-yuan (US$735 million) contract on Tuesday, the Guangzhou Daily said Thursday.

The deal, to be inked on the opening day of the 7th China International Aviation and Aerospace Exhibition in Zhuhai, Guangdong province, proves China’s homemade aircraft have won international recognition, experts said Thursday.

The ARJ21, an acronym for Advanced Regional Jet for the 21st Century, is China’s first homemade regional jet.

Asian buyers have showed interest in ARJ21 jets, with Lao Airlines having signed a letter of intent to buy two, CACC said in May.

But “it is very difficult to enter North America and Europe,” Chen Fusheng said over the phone. Chen is in charge of marketing another homemade turboprop aircraft, MA600. “Their (US and Europe’s) markets are mature, and aircraft makers have to pass time-consuming and high-standard tests before selling their planes,” he said.

The deal shows global buyers have confidence in ARJ21, Chen Jin, a CACC marketing manager, was quoted by Guangzhou Daily as having said.

The ARJ21 can carry 70 to 110 passengers, and rolled out of a Shanghai factory in December last year. It has yet to take its maiden commercial flight and get a certificate from the US-based Federal Aviation Administration (FAA).

Under the circumstances, signing of the contract shows the buyers are confident of Chinese planes’ performance, Chen Fusheng said.

The ARJ21-700 has a maximum range of 2,000 nautical miles, and is scheduled to take its first commercial flight by the end of November, Xinhua said.

(China Daily  October 31, 2008)

China Southern Air Holding Co. said yesterday that it will invest more than 10 billion yuan (US$1.5 billion) in the next three to five years to help develop airport facilities in northeastern China’s Liaoning Province.

China Southern, parent of the nation’s biggest air carrier, said in a statement that it will buy a 40-percent stake in Liaoning Province Airport Management Group Co. as part of the airport operator’s restructuring. But the Guangzhou-based company didn’t specify how much it will pay for the stake. Officials at China Southern were not available to comment yesterday.

China Southern plans to be involved in the construction of a third terminal at Shenyang International Airport where it will base up to 100 planes by 2020, according to the statement.

The carrier plans to add five to eight international flights from Shenyang airport in the next three to five years, the statement said, adding it will help improve services such as ground-handling and logistics. Separately it said it will likely fly non-stop from Guangzhou to Sydney and Melbourne by the end of this year.

China Southern will work with the Liaoning provincial airport management to develop a 1-million-square-meter aviation industry zone in the province and help it attract high-tech companies, according to the statement.

Shares of Shanghai-listed China Southern Airlines Co. slumped 3.90 percent yesterday to close at 2.96 yuan, compared with a 2.94-percent drop in the benchmark Shanghai Composite Index.

(Shanghai Daily October 30, 2008)

Shanghai airport management yesterday established an alliance with Dallas-Fort Worth International Airport, the second-largest airport in the United States, which may lead to the opening of direct flights between local airports and DFW.

Officials of Shanghai Airport Authority, the operator of the city’s two civil airports, said the tie-up would strengthen cooperation in various aspects of air hub maintenance.

Officials from the two airport authorities signed a Memorandum of Understanding in Shanghai yesterday on the alliance relationship.

DFW is the US’s ninth-busiest international gateway. It is the largest airport in the State of Texas and is the second-largest airport in terms of land area in the US, covering 7,315 hectares, behind Denver International Airport.

DFW handled nearly 685,000 flights and nearly 60 million passengers last year. The airport hosts five terminal buildings and seven runways.

Shanghai airport officials said they were planning to launch in-depth exchanges and cooperation in marketing, personnel training and management for an air hub with multiple runways and terminal buildings with DFW.

Last year, Shanghai airports handled 51.55 million passengers and a cargo turnover of 2.56 million tons - double the number of both passengers and cargo tonnage in 2002.

By 2010, in time for the World Expo, Hongqiao Airport will put into use its second terminal and runway.

By then, the two airports combined will have four terminals and five runways in service as well as a cargo transport zone, which opened in Pudong International Airport in March.

The Shanghai airports are expected to provide strong support in air transport capacity and service for the development of the economy in the Yangtze Delta region.

(Shanghai Daily October 30, 2008)

US aircraft maker Boeing said Wednesday China will become the second largest market for new commercial airplanes after the United States in the next 20 years, as the country’s aviation sector continues to grow rapidly.

Boeing anticipated that China will buy 3,710 airplanes before 2028 with a potential market value of US$390 billion, making the world’s new largest airplane market outside the United States.

“China will continue to be the fastest-growing aviation center in the world, requiring 41 percent of the entire Asia-Pacific region airplane demand,” said Randy Tinseth, Boeing commercial airplanes vice president of marketing, in a statement. “This makes China the largest market outside of the United States for new commercial airplanes.”

China’s passenger and cargo growth is likely to triple its total fleet number to 4,650 airplanes, about as many planes as there are in Europe today, according to the company.

Boeing said it expects single-aisle aircraft will account for 70 percent of new Chinese purchases and the company’s next- generation 737 jetliners will make up the largest category with 2, 600 scheduled deliveries.

Meanwhile, China’s demand for wide-body planes, such as Boeing 777 and the long-awaited 787 Dreamliner, will count for about 780 plane deliveries.

A strike by about 27,000 machinists working on Boeing’s assembly lines have forced the company to delay deliveries of new airplanes to customers in last two months.

The strike, starting early September, is expected to end this weekend after the machinists union and the company reached a settlement over a new four-year labor contract earlier this week.

(Xinhua News Agency October 30, 2008)

Air China, the country’s leading carrier, recorded losses of 1.94 billion yuan (US$284 million) in the third quarter as against profits of 2.187 billion yuan for the same period last year.

According to the quarterly report the company released on Wednesday, higher fuel costs, as a result from price hikes for oil on international markets, and lower returns on investments due to a bearish run on capital markets, accounted for the losses.

Lower demand for services was also blamed for the unsatisfactory performance.

The company’s losses in the first three quarters of this year were 657 million yuan, as against profits of 3.488 billion yuan for the same period last year.

(Xinhua News Agency October 29, 2008)

China Southern Airlines, the country’s largest air carrier, is adding more flights and routes.

Starting Oct. 26 and running until Mar. 28, 2009, the airline will have18 new routes, such as Wuhan to Sanya, Shenzhen to Sanya, Harbin to Taiyuan to Shenzhen and others.

According to a company press release, the number of weekly flights will rise to 7,688, up 12.15 percent from the same period last year.

For the domestic market, new tourism routes will be opened, and more flights will be added from southern Guangzhou, Shenzhen, Shanghai and Beijing.

With the upcoming peak tourism season for the country’s Hainan Island during winter and spring, the company will run 10 daily flights from Guangzhou to Haikou and eight from Guangzhou to Sanya. Another 14 new routes will be opened in the Shenzhen and Haikou markets.

There’s also changes to international flights. For example, Guangzhou to Sydney and Guangzhou to Melbourne will be changed to non-stop, direct flights this winter and spring.

In addition, one daily flight will now be available from Beijing to Seoul and Manila, from Guangzhou to Dubai and Delhi, and from Shenyang to Singapore.

There will also be one more flight added to routes, such as Guangzhou to Seoul and from Guangzhou to Bangkok.

(Xinhua News Agency October 27, 2008)

China on Thursday began deliberations on the Convention on International Interests in Mobile Equipment and its Protocol on Aircraft Equipment.

The treaty and its protocol, often known as the Cape Town Treaty, were tabled to law makers by the State Council, China’s Cabinet, at a bimonthly session of the Standing Committee of China’s National People’s Congress.

Adopted in Cape Town, South Africa, in November 2001, the treaty and its protocol conform to China’s legal principles and needs, the State Council said in a report to law makers.

“The adoption of the treaty and its protocol will help lower the financial cost of Chinese airline companies in leasing aircraft equipment and diversify its financing channels,” the State Council said.

The treaty intends to standardize transactions involving movable property, particularly aircraft and aircraft engines. It creates international standards for registration of ownership, security interests, leases and conditional sales contracts.

As of Aug. 31, 25 countries had approved the convention and 23 had approved its protocol.

The treaty and its protocol were expected to be adopted at the six-day session which lasts until Tuesday.

(Xinhua News Agency October 24, 2008)

Airbus A380, the world’s largest passenger jet, will be at the 7th China International Aviation and Aerospace Exhibition for three days.

The exhibition takes place in the southern Chinese city of Zhuhai, Guangdong Province, starting on Nov. 4, organizers of the exhibition said.

It will be the airplane’s second trip to China; it is coming from France. The A380 carried 2,000 tents this May for people left homeless by the 8.0-magnitude earthquake in Sichuan.

The super-jumbo jet, which is scheduled to arrive in Zhuhai on Nov. 3, will be on static display and will also perform flying demonstrations. Some visitors will be invited aboard.

The A380 was displayed around major Chinese cities last October.

The double-deck jetliner, developed by French aircraft manufacturer Airbus, can seat 525 passengers. It boasts energy efficiency as less than three liters of fuel is consumed to sustain 100 kilometers of flight per passenger.

Till now, eight A380s have been delivered to Singapore Airlines, Emirates Airline and Qantas Airline. Five of the planes will be delivered to China Southern Airlines in early 2009.

(Xinhua News Agency October 22, 2008)

The Commercial Aircraft Corporation of China Ltd (CACC) opened its service center in this city on Tuesday, as China’s home-made aircraft ARJ21 is ready for test flights.

Known as the Shanghai Aircraft Customer Service Co Ltd, it is located in the Zizhu Science Industrial Park in Minhang district. The center will provide aircraft maintenance and repairs, pilot training, aviation equipment, leasing and consultation.

Earlier this year, CACC announced it would be manufacturing aircraft with a take-off weight of more than 100 tons and capable of accommodating more than 150 seats.

Jin Zhuanglong, CACC’s general manager, said since the launch of the company in May, its jumbo jet program had been progressing steadily, and feasibility studies had begun.

The company has hired a team of domestic and overseas professionals to work on the aircraft’s design and manufacture.

CACC’s chairman, Zhang Qingwei, said the first trial flight will be held at Shanghai’s Pudong International Airport. However, he declined to give a date.

Meanwhile, China’s first domestically produced commercial regional jet, also manufactured by CACC, is scheduled for its maiden test flight at the end of next month.

The ARJ21 has entered the final stages of development, with test pilots putting the aircraft through it paces.

For its final test, the aircraft will be equipped with passenger seats.

“Everything is ready. I’m confident of a smooth maiden flight,” Zhang said.

The ARJ21, which is expected to sell for between US$27 million and US$29 million, can seat 70 to 110 passengers and has a maximum range of 2,000 nautical miles.

It is the world’s first aircraft designed for China’s natural environment and is capable of landing and taking off in extreme weather conditions. So far the company has received 200 orders.

(China Daily October 9, 2008)

Yunnan Airport Group Co, which owns 11 airports in southwestern China, is seeking domestic and overseas partners to build a freight distribution center to tap cargo traffic between China and South Asia.

Potential partners began bidding yesterday, Wei Ruosong, an official in charge of the bidding, said without giving details. The logistics center will cover 3.4 million square meters at Kunming Airport in Yunnan Province, said a statement on the provincial government’s Website, Bloomberg News reported.

Annual cargo volume at the airport will reach 600,000 tons in 2015 and more than triple to 2.1 million tons in the next 20 years. China’s rising demand for air transport has spurred plans to find international investment partners.

(Shanghai Daily October 8, 2008)