Airbus and China begin negotiations on Tianjin line’s future

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Airbus could produce the A320neo family of aircraft in China if it successfully negotiates an agreement to extend the life of its final assembly centre in Tianjin beyond 2016.

The company signed a joint venture agreement in 2006 with a consortium of the Tianjin Free Trade Zone (TJFTZ) and state-owned airframer Aviation Industry Corporation of China (AVIC) to manufacture A320s in Tianjin.

This agreement will end in the first quarter of 2016 after 284 aircraft are produced, but negotiations began around May to keep the line open beyond that timeframe, says Airbus China president Laurence Barron.

"In the initial contract, we had agreed on a date by which we had to begin negotiations on the future of the production line. We have begun negotiations in advance of that date. These discussions are a relatively long process," he adds.

The first re-engined A320neo aircraft are due to be delivered from 2016, and Barron says that it is only "natural" that the Tianjin final assembly facility will produce the newer variant of the narrowbody as the demand will be for that type.

"If we extend the final assembly line, the neo will come into place automatically and naturally," he adds.

The ongoing dispute between the Chinese government and the EU over the latter's unilateral imposition of an Emissions Trading System on all airlines has had "no impact" on the negotiations, says Barron.

While Airbus has not received any orders for the A320neo from its Chinese customers, the company is confident that this will come. Eric Chen, senior vice-president for commercial and external affairs at Airbus China, says that the lack of orders is because Chinese airlines typically make plans on a five-year basis.

"We are now in the 2011-2015 Five-Year plan, and the deliveries of the A320neo are beyond that. When the Chinese airlines start looking into the next five-year plan, the neo will come into play," he says.

Barron adds that the Chinese customers are aware of the popularity of the neo and that they need to begin discussions soon if they would like to book some of the early delivery slots.

"China does not live in a bubble. We continue to have discussions with our customers all over the world, including China, about all of our aircraft."