POSITION & HOLD
an editorial opinion
China speeds up bizav growth
ACAC ARJ21 regional jet, based on the MD90, will be China's 1st successful native airliner. Deliveries are expected in 2012—8 years behind schedule.
Embraer's China Market Outlook 2011–30 predicts that global aviation will grow by 5.2% annually for the next 20 years. Over that period, manufacturers will deliver nearly 31,500 aircraft worth $3 trillion. Airlines will add about 7000 jets in the 61 to 120-seat category critical to Embraer.
Chinese airlines will buy 975 of them—about 13% of global orders. Boeing says that China will need 3550 single-aisle airliners by 2030. Airbus substantially agrees. It forecasts Asia-Pacific sales of 5720 such aircraft in the period, with China among the largest single markets.
Bizjet makers are looking ahead to even better times. To anyone schooled in Western corporate aviation, it only makes sense that China's wealthy entrepreneurs will adopt bizjets as eagerly as their Western counterparts have done over the last 2 generations.
There are a lot of them. Hawker Beechcraft estimates that about 3 million Chinese have a net worth above $1 million. According to the Chinese Luxury Consumer White Paper 2012, prepared by the Industrial Bank Co and the Hurun Report Research Institute, some 63,500 individuals in the country possess assets of more than 100 million yuan ($15.8 million).
Another 8000 have upwards of $30 million—enough to put them in the elite class of potential jet buyers. Some 3000 have personal net wealth beyond $500 million, and 130 are billionaires. It is hard to look at numbers like these and not feel that the future of Chinese business aviation must be golden.
At the most recent Asian Business Aviation Conference and Exhibition (ABACE), held last March in Shanghai, Bombardier VP Aircraft Sales Christophe Degoumois put the business aircraft market in China at 2360 jets over the next 20 years—about 1 in 6 of the world's bizjet sales over the period.
Cessna predicts that within 15 years China will become the world's 2nd largest business aircraft market, trailing only the US. And Embraer's forecast for China for the next 10 years calls for industrywide sales of about 640 business aircraft worth $20 billion. Edwards expects to see sales of 40–50 airplanes per year early in the period and 70–80 later.
Boeing Business Jets Pres Steve Taylor reports that 10 of the company's 155 BBJs have gone to China, including 3 in 2011. He expects to sell 3–5 more of them there during 2012. Meanwhile, Dassault Senior VP Customer Service Jacques Chauvet estimates that his company will have sold 25 business aircraft to China by the end of 2012, tripling the number of Falcons in the country.
Chinese aviation officials predict sales of about 1250 civil helicopters between 2010 and 2020. One factor blamed for many of the 69,000 deaths in the Sichuan earthquake of 2008 was a shortage of helicopters to deliver rescue workers into the remote and mountainous region.
In Sep 2009 there were still only some 200 helicopters in the country. Eurocopter says it expects to sell an average of 10 commercial helicopters per year in China over the next 5–10 years.
China's 12th 5-year plan, announced in Apr 2011 and covering the period from 2011–15, made civil aviation a national priority. Major goals include the rapid expansion of civil airports, establishment of a modern ATC system, development of a hub-and-spoke system for international and domestic passenger transport, and rapid expansion in general aviation. All this is backed by a 5-year budget of about $250 billion.
Speaking at ABACE 2012, Civil Aviation Administration of China (CAAC) Deputy Dir Xia Xingua offered some details of what this will mean for corporate fliers. "The Chinese government is drafting specific rules to regulate business aviation," he said. "Various improvement measures and industry layouts are also under way."
Other plans he cited include "further opening" of low-altitude airspace to GA, the construction of 280 GA airports by 2020—including 40 designated for bizjets—and the establishment of a network of FBOs and MROs capable of supporting a modern aviation community.
Native design and manufacture of regional and long-distance airliners, military drones, and eventually business jets are also on the national to-do list. One result of all these developments, Xia believes, is that the number of bizjets in China will double by 2015 to more than 260.
Comac C919 mockup makes the airshow rounds, although the 168 to 190-seat narrowbody airliner is still under development. Introduction is set for 2016.
Chinese engineers can design capable airplanes. Chinese factories can build them. They seem to have proved that with the Chengdu J10 multirole fighter, unveiled officially in 2007. Built largely of composites and high-performance alloys, the delta-winged canard aircraft is generally rated the equal of a McDonnell Douglas FA18. The J20 stealth fighter now under development is expected to be even more capable.
Yet nothing China has done in the way of military jets proves that it can deliver a civilian aircraft that can stand up to its competitors in the West—or even one that pilots, passengers and airlines accustomed to modern Boeings and Airbuses, Gulfstreams and Falcons would be willing to fly.
China is not aiming at the bizjet market— yet. Instead, its efforts are going where it can move people most en masse—into regional jets and midsize airliners. It has 2 highly publicized civil aircraft projects in the works—the ARJ21 regional airliner and the C919 family of 168 to 190-seat narrowbody airliners. Both are being built by COMAC.
The ARJ21 Xiangfeng ("Soaring Phoenix") is a twin-engined design based on the McDonnell Douglas MD90, which was produced under license (in extremely small numbers) in China. The base model—the 700—will carry 70–95 passengers.
Later variants will include the 900, with capacities up to 105 passengers (to be developed in cooperation with Bombardier), a freighter version of the 700, and the ARJ21B—a 700 configured as a 20-pax bizjet. The long-range 900 variant will reportedly target the US market.
The ARJ21 project got its start in 2002 as part of the country's 10th 5-year plan. The aircraft was supposed to fly in 2005, entering service just 18 months later. Thanks to design delays, its wheels first broke ground in Nov 2008 and delivery was delayed until late 2010.
Then the wing failed during static testing before achieving its design load. As of May 2012, about 340 ARJ21s are on order. None has been delivered.
Still under development is the C919. Preliminary design was completed in Nov 2011, with detailed design expected to be finalized this year. First flight is scheduled for 2014, with deliveries to begin in 2016.