Airbus agrees massive China deal

Airbus has announced a series of investments and deals in China

1st Apr 2014


Airbus agrees massive China deal


Airbus has announced a series of investments and deals in China, as the row over ETS that had seen Beijing refuse to sign off on orders finally cools down.


Key parts of the agreement include:
• Tianjin A320 Final Assembly Line to be extended for another 10 years
• ATM cooperation to enhance Chinese airspace capacity
• Multiple initiatives to boost aviation’s sustainability in China focused on Wide-body fleet development
• Commitment for 70 Airbus aircraft including 27 A330 long range aircraft

Airbus said it “will strengthen its mutually beneficial cooperation with Chinese aviation industry in various fields, which include promoting Tianjin as an Asian Centre for Airbus and upgrading industrial cooperation in both scale and level.”
Airbus and its Chinese partners Tianjin Free Trade Zone and Aviation Industry Corporation of China (AVIC), have agreed to extend the successful Joint Venture to assemble A320 Family aircraft in China (FALC project) for an additional 10 years. The “phase II” will cover the period from 2016 to 2025, expand deliveries to the whole Asian region and include final assembly of the A320neo Family from 2017 onwards. During Phase II, capabilities of the Tianjin Final Assembly Line will be extended.


Airbus and the Chinese parties will jointly invite more major component suppliers to develop industrial projects in Tianjin, in order to support the development of the FALC and the formation of a competitive supply chain.


To accommodate the strong growth of the Chinese aviation, which is growing much faster than the world average, and to ensure its sustainability, the future partnership is also designed to focus on alleviating these challenges by launching two other areas of cooperation; supporting the CAAC with the latest state of the art Air Traffic Management (ATM) in order to boost the capacity of Chinese airspace, and driving research into regional sustainable jetfuel and other initiatives in order to reduce the Chinese aviation environmental footprint.

The two parties will also develop cooperation activities on Airbus wide-body programmes. Airbus and relevant Chinese parties will work towards demonstrating the interest of setting up a wide-body aircraft completion centre in China, which includes cooperation on wide-body cabin interiors with AVIC. The OEM’s panned regional variant of the A330 is aimed at the Chinese market.

Among the total of 70 Airbus aircraft ordered by CAS, there are 43 A320 Family aircraft and 27 A330 aircraft. This reflects “the strong demand of Chinese airlines in all segments of the market, including domestic, low cost, regional and international long haul markets,” says Airbus.

“We are going to celebrate 30 years of successful cooperation with our Chinese partners next year and I am proud that today we are strengthening the foundation for extending our successful cooperation into the future,” said Fabrice Bregier, Airbus President and CEO. – Colin Baker

Garuda in confident mood
Garuda is confident that it can weather the currency storm that has seen its financial performance deteriorate, with 2013 net profits coming in at US$11.2 million, compared to US$110.8 million for the previous year.


The Indonesian Rupiah lost around a quarter of its value against the US dollar last year – most of the carrier’s costs are in US Dollars, where as most of its revenue is in Rupiahs.
Estimating an exchange rate to the dollar of 11,500 to 12,000rupiah for this year Emirsyah Satar, Garuda’s President and CEO said “we feel that is a comfortable level at which we can do business.” The Government’s decision to allow airlines to raise fuel surcharges on domestic flights will help in terms of revenue, Satar said.
The carrier is also planning an IPO for its budget offshoot Citilink.


On the international front, Amsterdam will be joined by London later this year on the list of European destinations, while the carrier is also looking to add Chengdu and Chongqing to its network in China, where it currently flies to Beijing, Shanghai and Guangzhou. – Michael Mackey

 

Asian Aviation at a glance