Paris Air Show

Bombardier will invest in China’s AVIC

 - June 18, 2007, 12:04 PM

The relationship between the world’s third-largest aircraft maker and China grew closer with the announcement here yesterday of a long-term investment commitment between Bombardier Aerospace and China’s state-controlled aviation manufacturing consortium, Aviation Industry Corporation I (AVIC I).

Bombardier said it will invest $100 million in China’s ARJ21-900 regional airliner project as part of this cooperation agreement with the country’s AVIC I. The contract also calls for AVIC I to invest $400 million in research and development and construction of new facilities to support the development of the C Series regional airliner, if Bombardier ever gives the go- ahead for production.

A derivative of the ARJ21-700 now under development in Shanghai, the 105-seat ARJ21-900, would serve as a five-abreast, long-range regional transport to meet China’s growing need for airline service, particularly in the country’s mountainous west.

AVIC I president Lin Zuo Ming said the Chinese manufacturing consortium will officially launch the ARJ21-900 project later this year in anticipation of service entry in 2001.

Bombardier has much to gain from securing closer ties with AVIC I. According to forecasts, China will require 3,100 commercial aircraft in the next 20 years, nearly 900 of them for regional airlines. As a risk- and revenue-sharing partner on the ARJ21-900 project, Bombardier would provide technical and engineering assistance, cooperation that Lin predicted would lead to closer ties on future aircraft programs. “In aerospace there no competitors, only partners,” he said.

Bombardier has said development of the proposed 110- to 130-seat C Series would involve more than $2 billion in investment.

The Canadian manufacturer slowed the development of the airplane as it searches for a suitable engine supplier and a launch customer. The promise of development dollars from China, however, could put the project back on a fast track.

“The C Series and ARJ21 platforms are complementary,” said Bombardier Aerospace president and chief operating officer Pierre Beaudoin. “Bombardier decided to tap into the tremendous talent in China, expanding on our supplier relationship with AVIC I to other projects” that could include the C Series platform. If Bombardier indeed decides to launch the program, the C Series would enter service in 2013, he said.

Impact on Workers Unclear

It is unclear what impact a closer relationship between Bombardier and AVIC I would mean for workers in Belfast, Northern Ireland, where CRJ and Q Series aircraft components are produced. Bombardier has said in the past that C Series horizontal and vertical stabilizers and nacelles would be manufactured in Belfast, while the airplane’s fuselage will be built in China.

Beaudoin indicated that a closer relationship with China’s state-controlled aviation manufacturing group could lead to increased production activity in Belfast. “The more we are realistic about expanding globally, the more our employees worldwide will benefit” from these types of partnerships, he said.