Airframers calm amid the China airline capacity storm

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The world's top commercial airframers have responded in calm and measured tones to news that the Chinese government is urging carriers to curb capacity growth in 2009.

Airbus, Boeing, Bombardier and Embraer are trying to assess the potential fallout of a decision by the Civil Aviation Administration of China (CAAC) to encourage Chinese carriers to delay or even cancel delivery of aircraft scheduled for next year among a bevy of capacity-reduction measures. But they await specific requests from Chinese carriers.

By 30 November Airbus had a backlog of 430 aircraft on order from Chinese carriers. The European airframer also has a new A320 final-assembly line in the Chinese city of Tianjin. "We're committed for the long term to our Chinese partners," says Airbus.

Boeing, which has 347 orders from China in its backlog, mirrors that sentiment, saying: "We are continuing to work closely with our customers and with the government to ensure that we are in alignment on their requirement."

Embraer had early warning that some of its 50-seat regional jet deliveries in China were at risk before the CAAC announcement. Three ERJ-145s earmarked for Hainan Airlines regional subsidiary Grand China Express were not delivered in the third quarter due to a reduction in the planned growth of its fleet.

As a consequence, Embraer slowed down the supply of parts and the procurement of supplies to its Chinese joint venture Harbin Embraer, which produces the ERJ-145.

"On the ERJ-145, the negotiations between Harbin Embraer and Hainan on a revised delivery schedule are ongoing with no apparent pressure from the Chinese government," says Embraer executive vice-president airline market Mauro Kern.

"However, this recommendation by the CAAC still needs to be better understood as to which sectors of the air transport industry in China will be most affected on a demand-capacity basis and which will be the most affected by these measures," he adds.

Industry analyst Adam Pilarski cautions that the CAAC's announcement could be a negotiating tactic. "When you say 'forget it', it may mean 'forget it' or it may mean 'make me an offer I'll think about'," he says.

Aerospace Industries Association chief Marion Blakey says she would be surprised if Chinese carriers give up delivery slots for new-technology aircraft. "It is one thing if you are talking about [making] new orders, but another [thing] if you're talking about pulling out of the queue. That is what I would be surprised if they do."