Has Avic called a party knowing that no one is coming? The group says that in 2020 its newly formed Avic Business Jets will begin deliveries of a new high-performance aircraft developed with a foreign partner. The partner will initially supply a current-production type for assembly in China, it says. But all the conceivable partners for such a double program—the five main makers of business aircraft—are not interested.
There seems to be a possible partner only for a jointly developed new aircraft,(IAI), but even then the target of 2020 for completing development seems highly improbable. Even by the extravagant standards of Chinese aerospace announcements, which often appear to take little account of practicalities, this latest news strikes industry officials as remarkably implausible.
Since Avic was reorganized in 2008 into divisions based on product types, the group has stuck to a policy under which general-aircraft unit Caiga would build small business jets while fighter specialist AAT builds big, high-performance business jets at Chengdu. AAT would apply the development and fabrication technology derived from combat aircraft, frankly following the model of. Avic Business Jets, a subsidiary of AAT, is therefore China’s Dassault Falcon.
Military aircraft development and manufacturing technology is highly applicable to business aircraft, says AAT General Manager Wang Yawei. Moreover, AAT’s units, such as Chengdu Aircraft, have plenty of experience in making civil aircraft, and especially in subcontracting with, , Dassault and IAI. AAT is better positioned than other Avic divisions to achieve competitiveness in this field, he says.
Industry executives have expected AAT to offer aircraft with gross weights of 20 metric tons (44,000 lb.) or higher. Avic Business Jets is supposed to develop, market and support aircraft but apparently not run the factories that build them, following the pattern currently used by Mitsubishi Aircraft and formerly by Airbus.
Avic managers tell International Aviation, the Chinese partner publication of Aviation Week, that AAT has held talks with, Dassault, , , and IAI and is now in is deep discussions with several of those companies on the choice of an aircraft for local assembly and the levels of cooperation involved.
Only Dassault, Bombardier and Gulfstream make aircraft of the type that the new Chinese unit is targeting. Although the first two have discussed prospects with AAT, all three told Aviation Week at the April 15-17 Asian Business Aviation Conference and Exhibition that they had no plan to work with Avic Business Jets. “We have no ongoing discussions and do not think it can be economically viable,” says Dassault Falcon President Jean Rosanvallon.
Embraer and Cessna are conceivable partners, even though their product ranges are not quite right for Avic Business Jets. Embraer’s Legacy 650 is a suitable size but, being based on a small airliner, is not a high-performance type; and Cessna, while manufacturing purpose-built business aircraft, does not make anything of the right size. Embraer has no plan to assemble at Chengdu nor to develop a new type with Avic, says a company spokesman. Cessna’s position is the same, says an industry official familiar with the company’s Chinese strategy.
Until last year, Cessna intended to work with AAT to assemble the Citation Sovereign at Chengdu, but it abandoned the plan after deciding it should concentrate on joint ventures with Caiga (AW&ST April 7, p. 62). Cessna has taken over Hawker Beechcraft.
IAI, which has a history of cooperation with AAT’s Chengdu fighter works, is a conceivable partner for co-development of a new type but not assembly of a current one. The Israeli company has no business jet of its own, although it manufactures airframes for Gulfstream. At the 2012 Zhuhai air show Avic displayed a model of a proposed business jet that looked like the IAI 1126 Galaxy, which until 2011 was built as the Gulfstream 200.
Avic Business Jets supposedly plans to make its first delivery of a partner’s aircraft next year. Its plan, if there really is one, includes a slow beginning, with volume deliveries of the partner’s aircraft from 2018.
Meanwhile, preliminary design of a new type should be completed by 2016, with deliveries from 2020, as required by a government aeronautics policy issued last year, reports International Aviation. The promulgation of the policy may explain why Avic is announcing initiatives that it cannot achieve: By doing so, it shows it is following orders. From 2025 a derivative of the new aircraft should be on the market, according to the Avic Business Jets plan.
The four years allowed for full-scale development of the new type is unreasonably short, even if the great majority of the work were to be done by the experienced partner, say foreign executives. Bombardier, for example, announced its forthcoming Global 7000 and Global 8000 types 6-7 years before entry into service. Other companies sometimes schedule faster programs—and then miss the timetable. Moreover, sometimes they have begun detail design before the announcement.
Gulfstream did not respond to AAT’s 2010 request to the global industry for proposals for cooperation, apparently because the U.S. company saw no reason to help train a competitor. Other manufacturers with flourishing business-aircraft production lines should be in the same position.
Avic Business Jets plans to use brands of Avic and its partner in selling aircraft, says Avic Group Deputy General Manager Xu Zhanbin. While Avic Business Jets will be most closely supported by Chengdu Aircraft, two other AAT units, Shenyang Aircraft and Hongdu Aircraft, are supposed to be involved. As expected, the Chengdu city government, eager for local development, is an investor in the business jet enterprise, which was set up on March 5.
Sales of business aircraft in China will grow about 30% annually over the coming 10 years, AAT found in research conducted before setting up Avic Business Jets. Recent growth rates have been similar. By the end of the period, the country will be buying 1,000 business jets worth a total of 150 billion yuan ($24 billion) annually, according to AAT’s research. The assessment took into account factors such as China’s outlook for more moderate economic growth than seen in past decades; the infrastructure limits on the industry, which notably include access to airspace and a shortage of pilots; and lack of demand from state enterprises. Even though the state enterprises comprise a large part of China’s biggest businesses, they are forbidden to buy business aircraft and, lately, are even barred from chartering them.
“Medium-large” aircraft, the focus of Avic Business Jets’ activities, account for 45% of the Chinese market, AAT found. Avic’s strategy includes an eventual move into business aircraft leasing and operations.