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The Chinese Aerospace Market and C919 Programme
Paul Calver
UKTI Global Value Chain Specialist
Advanced Engineering
Contents
1. China – An Overview.
2. China’s Aviation History.
3. The Chinese Aerospace Market.
4. The Chinese Aviation Industry.
5. Current Development Programmes.
6. Cooperation.
• Total Area – 3.7 Million sq. mi.
• Population (July 2007 est.) – 1,321 million (Growth – 0.61%).
• Life Expectancy – 73 years. Literacy rate – 90.9%.
• Work Force – 800 million ( 24% Industry, 31% Services).
• GDP - $3.25 trillion, GDP/Capita - $2460.
• GDP Growth (2008) – 9% (6.4% last quarter) - 25 year Avr – 9%.
• Exports - $1.2 trillion ( 91% Goods - electronics, machinery,apparel, optical, photographic, medical and furniture).
• Imports - $917.4 trillion (electronics, machinery, mineral fuel andoil, chemicals and plastics).
• MVA 2007: 42.0% China (1st); 12.3% India (4th).
• 90% of Chinese High Tech Exports from Foreign Firms
• In 2006, Only 11% of Chinese Patent Filings Inventive.
• 2008 R&D Expenditure % of GDP 1.42% - Target 2.5%.
China – An Overview – The Stats
‘ The main goal is to upgrade the countries industrial structure in
order to make China an Innovation-Driven economy by 2020 ’
China’s Outline of National Medium and Long Term Science and Technology Development Plan (2006-2020).
China – An Overview - Policy
China’s 11th Five Year Plan(Until 2010).
Civil Aerospace Investment = $29 billion
Chinese Aviation History
• 1951 – Resolution on Building an Aviation Industryand Bureau of Aviation Industry (BAI) Established.
• 1953 – Established Aircraft Factories in Nanchang, Shenyang, Chengdu, Harbin and Xian.
• 1954 – 1966 Russian Assistance;Trainer; Swept Wing Subsonic and Supersonic Fighter;Medium Helicopter; Biplane Transport; Twin-Turboprop Airliner.
• 1965 to 1978 – Great Leap Forward and Cultural Revolution.
• Mid 1980’s – Opened up to Relationships with the West. French Helicopters and MD-82/83 licensed production.
• 1993 – AVIC and CATIC Group Established.Component Supplier– e.g.. B747, A300, B757, A320/318, B737, ATR72, Dash 8 etc
• 1999 – AVIC I and AVIC II – 10 New State Owned Companies.
• 2008 – AVIC Remerged and COMAC Established.
1970 – 1983 Shanghai Y10 Airliner
Chinese Aviation History
1985 – Shanghai Aircraft Industry Co – MD-82
1989 – Changhe Z11 Helicopter
1974 to 2009 – Harbin Y11/Y12 Utility Aircraft
2002 – Harbin/Embraer ERJ-145
The Chinese Aerospace Market
Air Passengers• 2008 – 3.3% rise to 185m passengers (2007 -16%).
• 2008 - Domestic Air Passengers Rose 17% (56.9m) • Predict 16% growth Annually for Next 20 Years.
• 1/5th of USA today -1/2 by 2026).
Air Cargo• 2008 – 0.3% rise to 1.18 Billion tons kms (2007 – 13%).
• Domestic Cargo 10% per year until 2030.
Airlines• 40 Domestic Airlines (10 State Owned)
• Consolidating Airlines.• Limiting the Growth of Aircraft to 150/year.
Aircraft (next 20 years)• Passenger Large – 1300 to 2800
• Passenger Regional – 500 to 1000 • Cargo – ? to 600.
• Civilian Helicopters – 100 to 3000• Business Jet – 42 to 600
• China will Account for 10% of World Demand
MRO2010 - 5% of World Market
• 650 aircraft in the next 5 years• 240,000 trained people required over the next 20 years.
The Chinese Aerospace Market
Airports• 2008 - 147 Airports (47 with over 1m Passengers)
• 11th 5 Year Plan – 47 New and 70 Expansions.• 260 Airports with Scheduled Flight by 2015
• $18.5 Billion Investment.
The Aerospace MarketBarriers to Growth
• Air Traffic Management System Congestion.
• Pilot Availability (55,000 Needed).
• 80% of Chinese Airspace for Military Use.
• Restrictions on Airline Growth.
• Airport Development and Security.
• Economic Climate.
The Chinese Aviation Structure
MOST CAAC CASC COSTIND GAD MOFCOM NDRC
STATE COUNCIL
AVIC COMAC
CATIC
SAIC(Shanghai)
SAC(Shenyang)
XAC(Xian)
CAC(Chengdu)
HAC(Harbin)
HAIG(Hongdu)
CHAIG(Changhe)
SAC(Shanxi)
XAE(Xian)
LM(Shenyang)
DEC(Dongan)
CAE(Chengdu)
SAEC(Shanghai)
Government Ministry
Industrial Group
Import/ExportAgent
Aircraft Manufacturer
Aero engine Manufacturer
The Chinese Aviation StructureMinistry
CAAC – Civil Aviation Administration of China
Policy and Strategy for Industry’s Development, ATM, Safety, Security, Air Service Agreements, Aviation Standards and Certification, and Airports
MOST – Ministry of Science and Technology
Policy and Strategy for Science and Technology, Coordinating Science and Technology Conducted at Universities, Participating in Large Projects.
COSTIND – The Commission of Science, Technology and Industry for national Defence
Industrial Development, Large Commercial Aircraft and JV’s, Controlling Policy Framework for AVIC, Foreign Cooperation and Acquisitions, Regulation of Export, Defence ProjectsConversion
The Chinese Aviation StructureManufacturing
Chinese Aviation Industry Corporation(CAIC/AVIC) Companies
• Chengdu Aircraft Design Institute (CADI)• Chengdu Aircraft Industries Group (CAC)• China Air-to-Air Missile Research Institute• China Flight Test Establishment (CFTE)• China Gas Turbine Establishment• Guizhou Aviation Industries Group Co (GAIGC)• Shanghai Aero-Engine Manufacturing Plant• Shenyang Aero-Engine Research Institute• Shenyang Aircraft Industries Group (SAC)• Shenyang Liming Engine Manufacturing Corporation (LM)
• Xian Aero-Engine Corporation (XAE)• Xian Aircraft Design and Research Institute (XADRI)
• Xian Aircraft Industries Group (XAC)
• Baoding Propeller Factory• Chengdu Aircraft Industries Group (CHAIG)• Changzhou Aero-Engine Factory (CAE)• Chengdu Engine Company (CEC)• Chinese Helicopter Research and Development Institute (CHRDI)
• Dongan Engine Company (WJ5/DEC)• Harbin Aircraft Industries Group (HAC)• Hongdu Aviation Industries Group (HAIG)• Shaanxi Aircraft Industries Group (SAC)• Shijiazhuang Aircraft Industry Corporation (SAIC)
• South Aero-Engine Company• Zhuzhou Aviation Power Plant Research Institute
• Sale Revenue $22 billion• Employees: >430,000 • 101 Large/Medium Sized Companies• 34 Research Institutes• Capital 64 Billion RMB ($9.5 Billion)• 10 Business Groups.
The Chinese Aviation StructureManufacturing
Commercial Aircraft Corporation of China Ltd(COMAC)
• AVIC I Commercial Aircraft Company (ACAC)• Shanghai Aero-Engine Manufacturing Plant• Shanghai Aircraft Manufacturing Factory (SAMF)• Shanghai Aircraft Research Institute (SARI)
• Established 2008
• Capital 19 Billion RMB ($2.8 billion)
• Stakeholders: Asset Supervision and Administration Commission,
Shanghai Guo Steel Group, AVIC, Bao Steel Company, China Aluminium,
and Sinochem.
• Focus: Aircraft Development; Systems Integration; Marketing; Customer
Service; Certification.
• Building Three Centres in Shanghai: R&D Centre (5000 employees),
Final Assembly (15000 employees); Customer Service
The Chinese Aviation StructureManufacturing
COMAC
Harbin Aircraft Industries Group
Shenyang AircraftCorporation
A320 Assembly Plant
Hongdu AviationIndustries Group &Changhe Aircraft Group
Chengdu Aircraft Industry Group
Xian Aircraft Industry Company
The Chinese Aviation StructureAirlines
China Southern
The Big Three
Others
• Shangdong Airline• Xiamen Airlines
• Shanghai Airlines• Hainan Airline
• Shenzhen Airlines• Sichuan Airlines
•Joy Air
Low Cost Carriers
• Spring Air• OK Airways
• Tianjin Airways• United Eagle
• East Star• Lucky Air
•Kunming Air
Chinese Aviation StructureMaintenance, Repair and Overhaul
Ameco – Beijing
Gameco - Guangshou
• Air China Limited (60%) and Lufthansa (40%) JV.• B747-400, A380, Engines and Components.• Extending Hanger at Beijing capital• FAA, EASA, CAAC Approved.
• Largest in China.• Giant New Hanger at Baiyan Airport.• B737-300/400 conversions.
Taeco - Xiamen• Expanding in Chengdu.
Main Players
Aircraft Development Programmes
Xian Aircraft Corporation: MA700 70 Seat Turboprop. Launch 2010 in Service 2017.
Advanced Engineering and Composites.
Guangdong Prosperous Airplane Co:CS2010 100 Seat Twin-Turbofan.
‘Pie-in- the-Sky’.
Bombardier and SAC:C-series 110/130 Twin-Turbofan.
Fuselage Built by AVIC’s,Shenyang Aircraft Industries Group .
Aircraft Development Programmes
Harbin Aviation Industry (Group) Co. Ltd and Eurocopter :
Zhi-15 (Z-15), 6,000kg-class Medium utility helicopter.
First Flight 2009, Civil Flight Approval 2012
AVIC Commercial Aircraft Corporation (CAC):
ARJ21 70–90 Seat Twin Turbofan.
First Flight - November 2008 in Service 2010/11.
Certification Assisted by Alenia. 208 Jets Ordered.
Handed Over to COMAC
Aircraft Development Programmes
ARJ21 Partners19 Suppliers for 24 systems
Aircraft Development Programmes
Commercial Aircraft Corporation of China Ltd(COMAC):C919 Large Jet (156 seat, 168 seat, and 180 seat).
• First test flight in 2014.
• In service by 2016.
• Investment $8 Billion.
• 1000+ Aircraft.
• 9 Domestic Fuselage Supplier Selected–Believed to Include, Shenyang, Chengdu, Xian, and Hongdu Aircraft Companies,
• 1st Tier Suppliers of Airborne Systems and
Power will be from Overseas.
• 1st Tier RFI Sent Out 26/2/09
– Selection This Year (TBC).
• 2nd and 3rd Tier Selection Next Year.
C919 - Selection Process and Criteria
1st Tier Systems
• Air Control• APU• Avionics• Cabin Interior• Cockpit Control• Control Panel• Electrical• Emergency Evacuation• Engines (Not included in JV Rule)• Engine Vibration Monitoring• Flight Controls
• Fire Protection • Fuel System• High Lift Actuator• Hydraulic• Landing Gear• Lighting• Oxygen• Pilot Seating• Water/Waste Water• Windshield• Windshield de-icing & Wiper
2nd and 3rd Tier Systems
Included on the Catalogue – COMAC R&D Department
C919 - Selection Process and Criteria
• Foreign Suppliers Must have a Long Term View of Collaboration with A Chinese Firm.
• Bid for Work as A JV/Cooperation with ChinesePartner (AVIC Company).
• COMAC will Sign Major Systems and Sub-System Contract with 1st and 2nd Tier Only.
• Suppliers on ARJ21 Will Have an Advantage Other Terms Being Equal with Other Suppliers.
Welcoming International CooperationA Must Win Programme
Cooperation
Airbus – A320/319 Final Assembly Plant in Tianjin.- Component Manufacture $60m.- A350XWB udder ad Forward Service Door.
Boeing – Component and Composite Manufacture.
Bombardier – Airframe Manufacture.- MRO.
Embrear – ERJ145 Manufacture.
Goodrich Corporation – Landing Gear.
Honeywell – C919 Systems.
CFM – JV Development
- Training School.
Just to Mention a Few
Follow the approach embodied by Deng Xiaoping's phrase
"Crossing the river by feeling for stones."
Summary
• High Growth Market.
• Opportunities Throughout The Value Chain.
• Funded Development Programme.
• C919 – A Must Win Programme.
• In Market Collaboration Essential.
• Long Term Strategy Needed but Must Not Wait.
Generic UKTI Services
• Passport to Export
• Export Communications Review
• Business Opportunities
• Overseas Market Introduction Service (OMIS)
• Export Marketing Research Scheme (EMRS) - Companies with fewer than 250 employees may be eligible for a grant of up to 50 percent of the agreed cost of market research projects
• Sector Reports
• Network Specialists
• Register on UKTI website to receive alerts and free information
15th September –SBAC– ‘Doing Business in China’
Contacts
In ChinaChina Aviation Industry Corporation (AVIC)Contact: Jun Zhou, Deputy Director GeneralZizhong Wu, DirectorDept of Marketing and International Co-operationTel: 8610 6566 6353
Commercial Aircraft Corporation of China, Ltd (COMAC)Contact: Mr TAO Zhihui, General Manager, International Cooperation and Supplier ManagementTel: 86-(0) 21-64846371Email: [email protected]
In UKUKTI SG 5b - Advanced EngineeringGlobal Value Chain Specialist Advanced EngineeringPaul Calver,Tel +44 (0) 1202 606142Mob+44 (0) 7917123667Email: [email protected]
Aerospace SectorNeil Semple, Head of AerospaceTel +44 (0) 141 228 3696Email: [email protected]
The Society of British Aerospace Companies (SBAC)David Scotter, Director, Market DevelopmentTel +44 (0) 20 7091 4500Email [email protected]
In ChinaChina Britain Business Council (CBBC)Contact: Stanley ZhangEmail: [email protected]: 86 10 8525 1111
British Embassy BeijingContact: Maggie WANG, Trade and Investment ManagerEmail: [email protected]
Douglas Barnes, First Secretary, Head of China Transport and Advanced Engineering TeamEmail: [email protected]: 86 10 51924000
