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- China-Airbus JV to deliver 300 A320 planes by 2016
Date: 29-Jun-2007 Sources: (Xinhua Online)
BEIJING, June 28 (Xinhua) -- The European aircraft maker Airbus said on Thursday it planned to deliver 300 A320 planes from an assembly line in northern port city Tianjin by 2016 to satisfy China's demand.
The assembly plant is a joint venture between Airbus and Tianjin Zhongtian Aviation Industry Investment Co., a Chinese alliance of China Aviation Industry Corp I, China Aviation Industry Corp II and Tianjin Bonded Zone Investment Co.
The two sides officially signed the contract to set up the joint venture at a ceremony held in Beijing to mark the occasion.
Airbus will hold a majority 51 percent stake in the Tianjin assembly facility, with the rest divided among the three Chinese companies, according to the contract.
The Tianjin Bonded Zone Investment Co. will have 60 percent of the rest stake on behalf of the Tianjin municipal government, while the China Aviation Industry Corp I and II will both have 20 percent.
However, the two sides kept silence on the total investment in the project. Analysts said earlier in estimation it would be at eight to 10 billion yuan (1.04 to 1.3 billion U.S. dollars).
'The Tianjin assembly line intends to deliver its first A320 plane in the first half of 2009, and we expect it to assemble four aircrafts a month from 2011,' said Marc Bertiaux, vice president of Airbus who is in charge of coordination with China.
Airbus said the Tianjin project would continue operation till 2015 at the earliest, and a total of 300 A320 planes would be assembled at the beginning of 2016.
'We would discuss with the Chinese side about further cooperation in Tianjin, if the above-mentioned goal were met,' said Bertiaux.
The general manager of the Tianjin joint venture would come from Airbus, and managers in charge of operation, quality and accounting would also be appointed by Airbus.
The Chinese side would nominate the vice general manager and heads of other supporting departments such as human resources.
'The Tianjin assembly line is an important part in the global strategy of Airbus, and the A320 planes to be assembled and delivered in China will be exactly the same as those made in Europe,' said Philip Lin, vice president of Airbus China Co. Ltd.
Experts say the cooperation project is a win-win deal giving Airbus the opportunity to tap into the vast Chinese aviation market and China the chance to accumulate experience in making big jets.
The plant in Tianjin, the first for Airbus outside Europe, includes assembly workshops, power stations, hangars and outdoor facilities. Construction on the plant has started since May 15, and the main body of the project will be completed at the end of this year. The assembly of the first plane is expected to initiate in August of 2008.
The average cost of each aircraft to be assembled in Tianjin will be a bit higher than that in Europe, according to Airbus. However, the aircraft maker is confident of the profitability of the project.
'The project will be profitable, and the Tianjin assembly line will help Airbus grow in China,' said Frabrice Bregier, chief operating officer of Airbus.
The labor cost in Tianjin is relatively low, but we have to pay a higher cost to ship plane parts from Europe to Tianjin via the ocean, and the employment of foreign staff and trainings of Chinese workers and engineers also lead to a hike in costs, Bertiaux explained.
Airbus began selling planes in China in 1985. The Chinese mainland now has more than 300 Airbus planes. In the coming years, Airbus will hand over 370 more to China based on current orders.
'Airbus will deliver an average of 80 to 90 A320 planes each year from 2009, thus, those produced in Tianjin will be mainly delivered to Chinese clients,' said Laurence Barron, president of Airbus China.
Airbus estimates that China will need more than 3,000 passenger or cargo planes from 2006 through 2025, and the aviation transportation in China will maintain an annual growth of 11.3 percent in the next 20 years.
'The assembly line is vital to an aircraft maker. The Tianjin assembly line will allow the Chinese aviation industry a broader access to core areas in jet making,' Barron told Xinhua while asked whether the project will benefit China in making its own planes.
The challenge is not in making the aircraft alone, and China should be able to sell the planes and provide follow-up supports to be commercially successful, Barron advised.
The country has begun the assembly of its first domestically-developed regional plane at the end of March, and the 90-seater plane --ARJ 21-- is expected to roll out of the workshop at the end of the year.
China has also approved the plan to design and build airplanes that can carry more than 150 passengers and compete with Airbus and Boeing, and hold it as a priority of its longer-term scientific and technological development strategy.
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