Business - Chinese win first overseas regional jet order

Raphael Minder

The Chinese national aircraft manufacturer, Commercial Aircraft Corporation of China, will announce on Tuesday that it has secured the first overseas order for its regional jet, worth about $750m, from General Electric’s leasing unit.

The announcement, which is set to be made on the opening day of the Zhuhai air show, confirms China’s commitment to the ARJ21 70-seater aircraft and its determination to challenge more established participants in the regional aircraft market, such as Bombardier of Canada and Embraer of Brazil.

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However, GE is already a supplier of engines for the ARJ21, and the US company said that the new aircraft would be earmarked for leasing to Chinese airlines rather than foreign carriers.

When GE was selected by the Chinese as the engine provider for the aircraft in 2002, the companies estimated that about 500 ARJ21s would be sold over 20 years, with a potential value of $3bn to GE.

Since then, however, analysts have noted that the ARJ21 project has been running behind schedule.

At the same time, demand is anticipated to falter because of the global economic slowdown.

While CACC, the company that was formed in order to spearhead China’s aircraft manufacturing sector, is expected to announce that the GE deal will raise the order book for the ARJ21 above the 200 mark, other newcomers are also making steady progress.

Mitsubishi of Japan is launching a regional jet while Sukhoi of Russia recently started test flights for its 75-seater regional aircraft, the Superjet 100.

“Chinese manufacturers will really need as much help as possible in this very crowded and very tough market for regional jets,” said Martin Craigs, president of Aerospace Forum Asia, a regional business chamber.

Given Chinese state control over much of its airline industry, CACC is likely to have little difficulty in finding domestic customers for its regional aircraft once it is time for it to be launched commercially.

The aircraft is due to make its first flight in the coming month and to enter service next year.

However, the Chinese authorities have long insisted that their aim is to compete in international markets, including plans to develop a larger aircraft model that will be double the size of the ARJ21 and that will compete with Boeing and Airbus aircraft