An alliance between two state-owned companies — AVIC1 and China Eastern Airlines — will form the Xingfu Airlines joint venture which will operate as China Joy Air. It is expected to promote sales support to AVIC1’s 60-seat MA60 and the larger 70-to-110-seat ARJ21 China-made aircraft. The Xi’an-based venture underlines the government’s efforts in promoting China-made aircraft.

According to a statement by the Civil Aviation Administration of China (CAAC) on February 29th, AVIC 1, China’s largest aircraft manufacturer, will hold 60% share of the joint venture while China Eastern Airlines will own the remaining 40%. AVIC1 will invest RMB 600 million in cash, while the remaining RMB 400 million will come from China Eastern.

Li Lei, a Beijing-based analyst at China Securities said that the right to make major decisions like aircraft purchasing is important for AVIC 1 as a newcomer to the airline industry. Li Lei said, ‘The regional carrier can also help complete China Eastern’s existing network.’

The CAAC further said in its statement that China’s aircraft fleet is projected to quadruple to 4,000 aircraft by the year 2020. By then, the aircraft developed by AVIC 1 will be able to compete with planes made by Brazil’s Empresa Brasileira de Aeronautica SA and Canada’s Bombardier.
Source: CCAR

The National Civil Aerospace Industrial Base of Xi’an, approved by the National Development and Reform Commission (NDRC), has been opened. This is another landmark development in the history of the civil aerospace industry after the State Civilian Aerospace Industry Base of Shanghai was launched on December 22, 2007.

Xi’an will become China’s second aerospace manufacturing center and is tasked by the NDRC to apply and develop aerospace technology and products by upholding the nation’s mid- and long-term spaceflight development strategy and developing satellite applications including satellite communication broadcasts, satellite navigation and remote sensory satellites.

It is also intended to drive the industrial development of advanced technology such as spaceflight information technology (IT), new-type material and advanced energy; guide the industry by garnering advanced technology with distinct characteristics and outstanding focus to make the country’s civil aerospace industry world class.
Source: People’s Daily Online

China Eastern, the nation’s third-largest carrier, has won official approval to establish a regional airline called Happy Airlines. (The name sounds a bit daft but so did EasyJet and Virgin the first time you heard them.)

The Beijing News reported that China Eastern will invest RMB400 million ($55.8 million) and take 40% in the new company, which will cater to west China’s middle and low-end tourist market.

The rest of the airline will be owned by the state-owned China Aviation Industry Corporation I (AVIC I), manufacturer of China’s first home-made passenger airliner ARJ-21.

The new airline will be based in Xi’an Xianyang International Airport in the country’s northwest and expects to hire transport plane pilots from the air force.

The newspaper said there are a handful of Chinese air companies running regional airlines, whose services are in huge demand but suffer from low profitability.

It further said, without elaboration, that China Eastern expects the new company to get beneficial treatment by the government. Beijing wants to boost the economy in the west to tackle unbalanced regional development. Note the illustration has nothing to do with the airline but this might be the image it wants to convey with its name.
Source: Economic Times

A Chinese company and a Russian aviation institute have agreed to launch a private airplane production project in northeast China’s Jilin Province.

The cooperative venture, with a total investment of RMB800 million ($106 million), is expected to produce 500 two-seat and four-seat light aircraft and seaplanes for private use every year with an estimated revenue of RMB800 million.

Jilin-based Dingxin Technology and the Moscow Aviation Institute will be the two owners.

The Chinese company will hold 60% and the remaining 40% will belong to the institute. It will be located in the Jilin Municipal Economic Development Zone nearly 100 km east of the provincial capital Changchun.

Matveenko Alexander, principal of the institute, said the planes are likely to enter the northeast Asian market after the project is put into operation.

Which raises the small problem of where the planes will fly in China. As matters stand the control of air space means that general aviation — the term used for small aircraft being used for private business and pleasure — has little space in which to manouever. No doubt this will change now that China is going to produce its own light aircraft.

The illustration is of a Chinese light aircraft, the Little Hawk-500, which is about to start a spin test in Xi’an. This was the last in a series of flight-tests and the aircraft waltzed through it. This was the first time civil aviation had had this test in China.
Source: China.org.cn

Xi’an Aircraft International plans to raise at least RMB6 billion ($770 million) selling new shares to its parent and other investors to help finance development of China’s first domestically produced commercial aircraft.

The company, the country’s second-largest listed aerospace firm by revenue, will sell 660 million shares on the Shenzhen Stock Exchange. At least 55% of the shares will be bought by its parent, Xi’an Aircraft Industry (Group), which has agreed to pay RMB9.18 a share.

The sale will more than double the number of outstanding shares. The company currently has 626 million shares, 43% of which are held by its parent.

Proceeds from the share sale will help fund development of the Advanced Regional Jet 21, or ARJ21, a small feeder plane that will seat up to 90 passengers. As China’s first domestically designed and manufactured commercial aircraft, the plane’s main body was completed and displayed in Shanghai last month and is due to make its first test flight in March next year.

The jet is the first step in the nation’s program to build a 150-passenger airliner to compete with Boeing and Airbus for a share of the US$2.8 trillion coming up in international airplane orders over the next 20 years.

The company currently makes parts for Boeing and Airbus, including tail fins for 737-700s and wing parts for Airbus A320s. The company posted a net profit of RMB63 million on sales of RMB1.78 billion in 2006.
Source: Shanghai Daily