Airbus considers China strategy

Jan 25 2006 By David Jones, Daily Post

REPORTS from Shanghai suggest that European aircraft maker Airbus is seriously considering building an assembly line for single-aisle aircraft in China.

State-run newspaper China Daily said Airbus is conducting a feasibility study, with help from the government and local companies, on an Airbus joint venture that would manufacture four single-aisle A320 series aircraft a month.

It quoted Airbus chief executive Gustav Humbert as saying: "If everything goes well, the company is expected to make the decision on building the assembly line plant in China in the middle of this year."

The rapidly-growing Chinese aviation market is hugely important to Airbus. Its A320 series jets are widely used for short haul routes in that country and the company has a 29% share of the Chinese aircraft market, way behind US aircraft maker Boeing's 67% share.

It has already outsourced the manufacture of parts including rear passenger doors and nose section components for Airbus jets to five companies affiliated with state aircraft companies.

Engineers from Airbus' wing factory on Deeside have visited China to advise on production.

An order backlog for more than 2,000 planes means that assembling some 50 jets a year in China is unlikely to impact heavily on operations at the Deeside site which employs 8,000.

Airbus said last October that it may outsource 60% of its production by giving more contracts to countries such as China and India in order to get a bigger foothold in those fast growing markets. But it insisted it would keep its "core competencies" to itself and said the jobs of the wingmakers on Deeside were not under threat.

The importance of China to the company was underlined just before Christmas when Chinese premier Wen Jiabao announced an order for 150 A320 jets worth nearly £600m. Airbus has a 29% share of the Chinese aircraft market, with US aircraft maker Boeing holding a 67% share.

* BRITISH Airways franchise partner BMED has taken delivery of the first of seven Airbus A321 jets on order as part of an expansion that will lead to a doubling of its fleet.

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