Chinese Bizjet Mismatch: Demand Vs. Assembly Plans

By Bradley Perrett, Graham Warwick
Source: Aviation Week & Space Technology

In deliveries, as always, the real action last year was at the heavy-metal end of the market, with fleets growing by 36 aircraft for Gulfstream, 25 for Bombardier and nine for Dassault. Airbus and Boeing corporate airliners dominated the other 26 net additions.

China's links with Western general- and business-aviation manufacturers trace back to the 1970s, when Beijing purchased French helicopters for its military. This led to local manufacture of the Aerospatiale SA321 Super Frelon as the Changhe Z-8 and the AS365 Dauphin as the Harbin Z-9. Civil versions of these—the 14.5-ton AC313 and 4.5-ton AC312, respectively—now form the core of Avicopter's commercial lineup. This early link lead to China taking a 24% share in developing Eurocopter's 1.5-ton EC120, built by Harbin since 2004 as the HC-120.

In 2005, agreement was reached to co-develop the Eurocopter EC175 and Avicopter AC532 (Z-15) medium helicopters, with Harbin supplying airframes for the 8.3-ton EC175. Other civil helicopter deals followed, including AgustaWestland in 2005 establishing a joint venture with Changhe to assemble the 3.2-ton AW109 as the CA109. In 2007, Sikorsky signed a deal with Changhe to supply S-76C airframes, which has now transitioned to the supply of S-76D airframes beginning in 2016. In each case, the motivation was access to China's market and low labor costs.

Helicopters also led to China's first acquisitions. In 2007, industrialist Cheng Shenzong struck a deal to build the Brantly B2B light helicopter in Qingdao, and later develop the obsolete design into China's largest unmanned helicopter, the V750, built in Weifang and first flown in 2011. In 2012, in another U.S. acquisition, Enstrom Helicopters was purchased by Chongqing Helicopter Investment.

What has become a major push by Chinese industry into the general-aviation (GA) market began when, in 2007, Cessna announced that, to reduce costs, its Skycatcher light-sport aircraft would be produced by Avic company Shenyang Aircraft. The decision sparked controversy, which did not subside when, in 2010, Caiga agreed to buy bankrupt U.S kitplane maker Epic Aircraft. The bankruptcy judge blocked plans to relocate production to China.

Ulimately, Epic was sold to a Russian company, but Caiga acquired Epic's designs for a family of single-turboprop, single- and twinjet aircraft, which now form the basis for its Primus and Starlight product lines. China's first indigenously developed business aircraft, the all-composite Primus 150, is powered by an 850-shp. General Electric H85 turboprop. First flight is planned for this month; certification is eyed for 2015.

China's buying spree did not end there. At the end of 2010, Avic company Technify Motor acquired U.S. piston aero-engine manufacturer Continental Motors from Teledyne. This July, Technify acquired insolvent German aero-diesel manufacturer Thielert Engines, merging it with Continental and positioning itself to supply both the traditional gasoline-fueled GA market and growing international demand for light aircraft burning easier-to-find jet fuel.

In its biggest deal yet, in 2011, Caiga acquired U.S. light aircraft manufacturer Cirrus. The Chinese owners have invested a lot, setting up assembly of SR20/22 piston singles in Zhuhai and, in the U.S., accelerating development of the Vision SF50 single-turbofan personal jet, which is expected to be certified in 2015. Cirrus is to produce airframes for Icon Aircraft's A5 light-sport amphibian and, in June, Icon announced a “privately held strategic investor in China . . . well established in the Chinese general aviation market” had taken a stake in the company.

Chinese industrialist Cheng, meanwhile, did not stop at Brantly, and in 2009 acquired Superior Air, a then-bankrupt U.S. manufacturer of aftermarket parts for Continental and Lycoming piston engines. His company, Beijing Superior Aviation Technology, then initiated China's boldest move yet, teaming with the Beijing municipal government in a bid to buy U.S. business and GA aircraft manufacturer Hawker Beechcraft out of bankruptcy. Hawker Beechcraft called off the negotiations in October 2012.

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