For Boeing and Airbus, Partnerships Proliferate in Asia

Singapore Air Show » 2014
A worker loads aircraft parts into a new autoclave at the expanded Aerospace Composites Malaysia facility, jointly owned by Boeing and Hexcel. The factory is to be expanded by 40 percent to accommodate increased production by Boeing Commercial Airplanes.
A worker loads aircraft parts into a new autoclave at the expanded Aerospace Composites Malaysia facility, jointly owned by Boeing and Hexcel. The factory is to be expanded by 40 percent to accommodate increased production by Boeing Commercial Airplanes.
February 10, 2014, 5:20 PM

Asia Pacific governments have long considered development of their aerospace industries a prime opportunity for technology renewal and overall economic growth. Several big OEMs have answered the call to help, allowing countries such as Singapore and Malaysia to develop into some of the world’s most active aerospace manufacturing, services and technology centers. Others, such as the Philippines, Thailand and Indonesia, show particular promise due to their rapidly expanding economies and young, energetic populations hungry for jobs.

Meanwhile, the fact that the Asia Pacific region ranks as one of the most valuable airliner markets in the world has become irrefutable. Of course, the world’s two dominant airframe makers, Airbus and Boeing, understand the value of maintaining close ties with local industry and exercising good corporate citizenship everywhere they sell their products. But in markets as prized as those in Southeast Asia, China and, indeed throughout the Pacific Rim, they view those efforts as critical.

For Airbus (Stand J23, Chalet CD19), the recent expansion of a joint venture with Malaysia’s Sepang Aircraft Engineering (SAE) and the establishment of a new customer services center adjacent to SAE’s Kuala Lumpur facilities marked the latest expression of that recognition.

The new agreement will see the construction of a new 13,000-sq-m hangar capable of accommodating three A320s for major maintenance checks. SAE’s existing hangar already can hold six single-aisle airplanes at a time.

“With a skilled talent pool, quality workmanship and competitive cost base, Malaysia is one of the countries that have the right ingredients to become a key partner for Airbus,” said the company’s president and CEO Fabrice Brégier. “This is in line with our strategy to have a stronger footprint in international markets and develop our support services for operators of our aircraft nearer to their home bases.”

Nearly a Third of Airbus Orders

The Asia Pacific region as a whole accounts for 31 percent of all orders recorded by Airbus to date. More than 2,270 Airbus aircraft fly for 98 operators across the region, while the company has collected firm orders to deliver another 2,000, accounting for about a third of the company’s total backlog.

It hasn’t happened by accident. Over the years Airbus has partnered with aerospace manufacturers in countries such as Australia, China, India, Indonesia, Japan, South Korea and Malaysia. Increasing levels of partnership in recent years include significant programs in China, perhaps the most visible being the A320 final assembly line (FALC) in Tianjin. Chinese industry has now developed many of the disciplines necessary to become a significant manufacturer of composite material parts for the A350XWB and the A320 family, as well as full wing equipage and testing for aircraft under assembly in Tianjin.

Other wing components for the A320 come from Malaysia, where several suppliers now build Airbus parts such as composite structures for the A380 and components for the A400M military transporter. In India, the company has invested in a new engineering center in Bangalore, which is involved in the development of “advanced capabilities” in modelling and simulation, and covering areas such as flight management systems, computational fluid dynamics and digital simulation and visualization. In South Korea, the Korean Air aerospace division (KAL-ASD) has served as a major supplier to Airbus since 1998 and it now provides the new Sharklet wingtip devices for the A320 and A320neo.

Boeing’s Asian Tie-ups

For its part, Boeing sees just as much value in cultivating ties with Asia Pacific suppliers, including KAL-ASD, which has won a contract to supply Boeing with wingtip devices for the 737 Max. Recognized as Boeing supplier of the year in 2000, 2006 and 2012, KAL began making parts for the U.S. manufacturer in 1999, starting with 777 X-frames. It now works under contracts to provide 777 nacelle fittings, 737 empennages, 787 raked wingtips and Dreamliner pivot bulkheads.

In Malaysia, a joint venture between Boeing and UK composite specialist Hexcel, called Aerospace Composites Malaysia (ACM), makes flight surfaces for all of Boeing’s commercial programs, including the Next-Generation 737, 747-8, 767, 777 and 787 Dreamliner. Just last November Boeing and Hexcel announced a 40-percent factory expansion of ACM to support increased production by Boeing Commercial Airplanes.

The $17 million investment by Boeing and Hexcel adds 125,000 sq ft to a factory footprint that now totals 440,000 sq ft, and the project includes a clean-room expansion of 11,000 sq ft and installation of $5 million in new equipment. With the added capacity, ACM plans to expand its manufacturing workforce beyond its current 950 employees, cementing its position as the region’s leading employer. The company expects to partially use the added capacity to start production of 787 fixed leading-edge panels in 2014.

Perhaps most famously, 35 percent of the 787’s fuselage comes from the so-called Japanese “heavies,” namely Mitsubishi Heavy Industries, Kawasaki Heavy Industries and Fuji Heavy Industries. When Boeing signed MHI to build the main wing box, it marked the first time the U.S. airframer entrusted the design and manufacture of such a critical part to another company. Other components supplied by Japanese firms include tires, gearboxes, trailing-edge flaps, lavatories, flight deck interiors, altimeters, actuators, valves and video entertainment systems. Also, Toray Industries provides the composite materials for the 787.

The China Connection

Still more critical Dreamliner parts–such as the rudder, wing-to-body fairing panels, vertical fin panels and leading edges–come from China, whose companies play a role on every one of Boeing’s commercial airplane models. Apart from the Dreamliner parts, Chinese companies supply horizontal stabilizers, vertical fins, aft tail sections, doors, wing panels and wire harnesses for the 737. For the 747-8, they make trailing edge wing ribs, vertical fins, ailerons, spoilers and inboard flaps.

Boeing’s large China investments include a joint venture with AVIC called the Boeing Tianjin Composite Co. and a partnership with China Eastern Airlines and the Shanghai Port Authority known as the Boeing Shanghai Aviation Service Co. The largest aerospace employer in Tianjin, Boeing Tianjin makes interior parts and composite structures for Boeing commercial airplanes. Boeing Shanghai performs line maintenance, heavy maintenance, airframe modifications and upgrades for interiors, avionics and in-flight entertainment systems.

The level of Boeing’s investment in China–it ranks as the country’s leading commercial purchaser–should come as little surprise. The company projects that over 20 years China will need 5,580 new airplanes, making it Boeing Commercial Airplanes’ largest customer.

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