Analyzing China's increasingly favorable environment for corporate aircraft use
China's second attempt at an indigenous passenger jet, ARJ21 looks set to become a mere stepping stone to a more useful product, at least in theory.
So far, Chinese business aircraft initiatives have taken 3 forms. The first is acquisition, the second is aircraft coproduction, and the third is development of homegrown business aircraft. The acquisition part began in 2011 with CAIGA purchasing Cirrus, Teledyne Continental Motors and some rights to bankrupt Epic Aircraft.
The second part—coproduction—will involve 2 phases. The first will see production of a Western business jet shifted to AAT's Chengdu facility. This will likely involve a supermidsize design. The second will see AAT codevelop an all-new design with the same foreign partner.
So far, AAT has begun negotiations with Bombardier, Cessna, Hawker Beechcraft and Israel Aerospace Industries (IAI) for the 2-phase aircraft coproduction/ development program. Of these, Bombardier's Learjet 85 and Hawker Beechcraft's Hawker 4000 have a strong advantage.
Both designs use composite primary structures—a technology to which China's aircraft industries would want access. These aircraft also have advanced avionics suites and other modern features. There should be a decision in early 2012.
Finally, there is local aircraft development. This is in a very early stage, largely involving the usual artists' concepts. Earlier in 2011, CAIGA released an illustration of a midsize business jet design.
This looked like a composite of almost every Western business jet currently in production (swept wings with winglets, 2 rear-mounted engines, T-tail, etc). But, as of the time of writing, no firm plans have been announced, and the aircraft hasn't even been given a name.
If China does succeed in creating a domestic bizjet manufacturing industry, there's also the prospect of them making it a vertically Chinese creation with homegrown components. AVIC Engines' China Gas Turbine Establishment claims to be developing 2 business jet engines.
One will be in the 2200-lb class, the other around 7000. Resources for these programs are uncertain, and no availability date has been provided.
This pattern—creating a domestic supply chain—is also the goal of China's jetliner industry. It represents an obvious way of keeping a greater share of the market's value in-country. Yet in aviation, it's essential for aircraft designers to be able to source globally.
Finding the best engines, avionics and components at the best price has been the key to success for aviation market leaders. Mandating a vertical national industry is basically the approach taken by the old Soviet Union's aerospace industry, with predictably mediocre and uncompetitive results.
Despite all the big schemes and notable acquisitions, China's business aviation plan is so far notable for what it has not done. CAIGA looked at acquiring Sino Swearingen, whose SJ30 would have given it an almost production-ready light jet for a relatively trivial sum. (Metalcraft Technologies acquired it from bankrupt Emivest in Apr 2011 for $5.2 million, or $2.0 million less than the unit cost of a single SJ30.)
Rumors of China acquiring a big aircraft company, such as Cessna, have come to nothing. CAIGA also does not appear to be in a rush to fund Cirrus's long-awaited Cirrus Vision personal jet, even though the competing PiperJet Altaire was shelved recently. China has well-publicized business aircraft ambitions, but so far it appears to be moving cautiously and slowly.
Jetliner similarities and differences
Chinese Y8 transport, based on Antonov's AN12. Throughout the years, copying Soviet (and ex-Soviet) designs to meet military needs has been a priority for China's aviation sector.
When assessing the future of China's business jet industry, it's helpful to look at China's experience with jetliners. It's also helpful to compare the business jet and commercial jetliner markets.
First of all, China has a rich tradition of building jetliners, or at least attempting to build them. In the 1970s it built a prototype national jet—the Shanghai Y10 (basically a copy of Boeing's 707)—but the plan switched to coproduction in the 1980s.
China built 35 McDonnell Douglas MD80s under license in Shanghai. These were to be followed by 150 MD90s, but this was later reduced to 2 planes. China also signed an agreement to build the McDonnell Douglas MD95, but this went nowhere, and the plane was later resurrected as the unsuccessful Boeing 717 and built in the US.
In Dec 2005 Airbus signed an agreement with China's National Development & Reform Commission to establish an A320 final assembly line (FAL) in China. In Jun 2006 Tianjin was selected for the site, which is modeled on Airbus's XFW (Finkenwerder, Hamburg, Germany) plant. The first plane (for Sichuan Airlines) rolled off the line in Jun 2009, with an anticipated rate of 4 planes per month.
China's first home-grown production jet could be the C919—a 150/170-seat narrowbody being developed by China's Commercial Aircraft Corporation of China (COMAC). Launched in 2008, the C919 will use General Electric Leap-X engines.
Intended to compete with the Airbus A320 and Boeing 737NG, it is scheduled to fly in 2014 and enter service in 2016.
China has also built a variety of regional transports, most notably the Xian Y7/MA60 series (based on the Soviet Antonov AN24). None has enjoyed any significant export success, and domestic orders have been thin too. A Chinese company, D'Long Investments, purchased the bankrupt assets of Fairchild Dornier and its 728JET program, although this sank without a trace.
Embraer also established an ERJ145 regional jet production line in Harbin, which produced fewer than 50 aircraft before converting to Legacy 600/650 bizjet production. China's own ARJ21—a 78-seat regional jet—has been in development for over a decade and still faces serious technical challenges that will delay certification for at least another year. Its technical features are unappealing, at best.
By contrast with this tapestry of commercial aircraft failure, China has had no experience in producing indigenous business aircraft. Nor does it have any experience with licensed production of Western business jets. When it comes to business jet production, China is a clean slate.
The first notable difference between the 2 markets is their current health and direction. The jetliner market has grown by over 10% (by value of output) since 2008. This market is still expanding, with double-digit growth anticipated for the next 2 years at least.
By contrast, the business jet market has declined by more than 1/3 since its 2008 peak. The small and medium segments have been particularly hard hit, with deliveries falling by 57% in value. As yet, there are few signs of a sustained recovery.