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		Mon, May 12, 2008 The Straits Times
China's flight plan: To build commercial jets
BEIJING - CHINA has established a company to build regional commercial jets, with an eye to eventually reducing the country's reliance on Boeing and Airbus for such aircraft, official media said yesterday. Commercial Aircraft Corp of China is capitalised at 19 billion yuan (S$3.7 billion), Xinhua news agency said. It said the central government and the Shanghai government are among the major shareholders, as are China's two main aircraft manufacturing and servicing companies - China Aviation Industry Corp I (Avic I) and China Aviation Industry Corp II (Avic II).

China unveiled its first domestically developed regional jet, the 90-seat ARJ21-700, late last year. It will be test-flown later this year and deliveries are scheduled to begin some time late next year.

The aircraft will be assembled in Shanghai. The nose, fuselage and tail sections will be manufactured in other parts of the country by companies controlled by Avic I and Avic II, according to earlier press reports.

Europe's Airbus has forecast that China's domestic market will increase fivefold by 2026.

Airbus and its American rival Boeing dominate the world market for commercial aircraft carrying 100 or more people.

China's long-term goal is to manufacture large passenger jets with more than 150 seats, or freighters capable of handling more than 100 tonnes of cargo, to give it a presence in the global commercial jet market.

But many analysts have expressed scepticism about the commercial prospects of a large jet designed and manufactured entirely in China, given the country's limited experience in big aircraft.

'They might be able to establish a presence in the business over the next 10 to 20 years,' said aviation analyst Richard Aboulafia, adding a key caveat:

'If they nurture it with government seed cash, and gradually offer shares to the private sector.'

Mr Jin Zhuanglong, the general manager of the new company, said in a Xinhua interview that it was too early to say when a Chinese-developed jumbo jet would be taking off, as it would take a long time to develop home-grown talent and carry out research.

China will make full use of worldwide resources to develop the aircraft.

It also welcomes cooperation from foreign companies, he said.

General Electric's aircraft leasing arm said in March that it had signed a preliminary agreement to buy five ARJ21s, the first order from a major foreign customer.

The ARJ21 has attracted 181 orders so far, mainly from domestic carriers.

Avic I and Avic II supply components to Airbus and Boeing for the double-decker A380 jumbo jet and the 787 Dreamliner respectively.

REUTERS, ASSOCIATED PRESS