Harbin-Embraer–the manufacturing joint venture established in January last year by Brazil’s Embraer and AVIC II subsidiaries Harbin Aircraft and Hafei Aviation–secured a launch order for Chinese- built ERJ-145s from China Southern Airlines last month, ending a tedious wait for evidence of the program’s commercial viability. The contract calls for the sale of six of the 50-seat regional jets, the first of which China Southern plans to accept in June, followed by the final five through next January.
The largest airline in China for the past 23 years, China Southern had already bought and assigned five Brazilian-built ERJ-145s to its Sichuan Airlines regional arm in 2000. In fact, China Southern had ordered 20 of the jets, but an abrupt government decision to slap prohibitive import duties on foreign-built regional airplanes guaranteed that no more RJs would enter the country. Next, the government invited Western manufacturers to enter co-production agreements with its state-run aerospace agencies. Embraer won the contract for 50-seat jets.
However, the onset of SARS virtually halted any growth of Asian regional markets, forcing the likes of China Southern and Wuhan Airlines to suspend plans to expand their domestic presence with regional jets. Embraer hopes the long-awaited order from China Southern last month marks the start of a trend reversal.