Airbus rolls out first "Made in China" aircraft
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Airbus SAS, the world’s largest commercial planemaker, rolled out the first aircraft assembled at its China factory as it seeks to win more orders in the world’s second-largest aviation market.
The planemaker aims to deliver 10 more A320s this year from its factory in Tianjin, near Beijing, it said in a statement today. Production at the plant, Airbus’s first outside Europe, will be raised to four aircraft a month by the end of 2011.
Airbus is competing with Boeing Co. to grab orders in China as it seeks sales in emerging markets to help offset slumping demand in the U.S. and Europe. China will probably need 3,238 passenger planes valued at $391.2 billion from 2007 to 2026, according to the Toulouse, France-based planemaker.
“A factory in China is a plus for Airbus, but lower prices are still critical to get new orders in the future,” said Li Lei, an analyst at China Securities Co. in Beijing. “The narrow-body A320 is catering to the rising domestic air travel market.”
Airbus is due to deliver 70 A320s to China this year, so some will come from France, said Laurence Barron, Airbus’s China president. The five A380s ordered by China Southern Airlines Co. are on track for delivery by 2011.
“The ramp-up capacity of 48 planes a year is insufficient to meet demand,” Barron said. “China is doing well domestically.”
Domestic passenger numbers rose 17 percent to 56.9 million in the first four months, while traffic on international routes fell 17 percent to 5.6 million, according to the Civil Aviation Administration of China. Passenger numbers rose an average 16 percent in the past 30 years to 190 million last year.
China aims to boost travel to 700 million trips annually in 2020, Li Jiaxiang, director of the Civil Aviation Administration of China, said on April 8.
Airbus won a $17 billion order for 160 planes in November 2007, following two $10 billion deals for 150 aircraft in 2005 and 2006. Boeing’s last big Chinese order, in 2005, was worth as much as $9 billion.
Airbus and Boeing are dueling this year to save jet orders as airlines park planes. Chicago-based Boeing collected zero net orders in the first five months of the year as 65 purchase agreements were countered by an equal number of cancellations. Airbus had 11 net orders after 21 were dropped.
That compares with a combined 884 agreements in the same period a year ago, the end of a four-year buying spree in which airlines rushed to add more fuel-efficient jets amid surging oil prices.
Made in China
Airbus intends to assemble 286 aircraft at its plant in Tianjin by 2016, the city’s mayor Huang Xingguo said on March 9.
Industrial and Commercial Bank of China Ltd. will also supply more than 20 billion yuan ($2.9 billion) of financing to domestic carriers for as many as 70 A320s built in Tianjin, the planemaker said in an e-mailed statement yesterday.
Airbus will consider selling China-made planes overseas once it has satisfied the domestic demand, Barron said.
“You should consider Tianjin as the same as Toulouse and Hamburg,” Barron said. “There’s no reason why non-Chinese airlines can’t take Made-in-China A320 in later years.”
Sichuan Air will use the first A320 plane on routes serving Beijing, Shanghai and Guangzhou starting tomorrow. The plane is one of 13 A320s that Dragon Leasing has bought from Airbus.
“Whether China’s growth proceeds like a surging wave or a revolving propeller, the trend is positive and increasing,” said Sichuan Air’s president Lan Xinguo. “When air travel becomes a consumer pastime, that’s when you see the real peak of the aviation demand and industry growth.”