AVIC looks for sales in developing nations

Singapore
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China is building a customer support network in developing countries to boost its aircraft exports.

Executives at AVIC International, the company responsible for exporting Chinese-made aircraft, say China's sale of aircraft overseas was impeded by its earlier inability to properly support the product.

"In the 1990s we exported more than 100 Harbin Y12s worldwide, but we had a difficult experience and customers were not happy," says AVIC International vice-president civil aircraft marketing and sales Xu Bo, referring to the 19-seat Y-12 turboprop.

Xu admits that "we have a big problem in terms of customer support and service", although he adds that "we have made progress and are improving".

j patokal
 © J Patokal

AVIC International mostly sells aircraft to developing countries politically aligned to China. In more recent years it has had success selling 50-seat Xian MA60 turboprops to developing countries in Asia, Africa and Latin America. "Our customers, especially those in Africa, don't have such good capability to support aircraft," says Xu.

AVIC International has responded by establishing spare parts centres in Egypt and Zimbabwe as well as a customer support centre in Zambia with four maintenance engineers on staff, he says. Those engineers travel around Africa supporting MA60 customers, says Xu.

Air Zimbabwe has three MA60s and the Zambia air force has two of the aircraft, which it ordered in 2006, while Xu says the West African countries of Ghana and Senegal have each just ordered two MA60s.

In South America, Bolivia's national carrier has two and "in Latin America we will have a customer support centre maybe next year", says Xu.

China has sold MA60s to Laos national carrier Lao Airlines, Indonesia's national carrier Merpati Nusantara as well as to privately owned Philippine carrier Zest Airways.

Xu says there is no need to establish a spare parts centre in Asian countries such as Laos because they are so close to China.

Besides spare parts, AVIC International provides training for pilots, cabin crew and maintenance engineers, says Xu, adding that this takes place in China. "We also provide on-site technical support for two years," he says.

Generally speaking for "every two aircraft, we have six to eight maintenance engineers that work on site for the first year and in the second year maybe have three or four personnel", he adds.

FINANCIAL HELP

Many countries order MA60s because of the financial assistance China provides. "AVIC International has the full support of the Chinese government", says Xu. This includes help with arranging financing, he adds.

Xu says there are four options: to obtain financing from a Chinese state-controlled bank; have the Chinese government pay for the aircraft and give it as a gift; get the aircraft on finance lease from AVIC Aircraft Leasing; or strike a barter deal.

Some countries have paid for Chinese aircraft by granting China fishing rights or other natural resources, he adds.

Western aircraft companies often dismiss China as a competitive threat by claiming China is unable to provide good customer support. But the nation's willingness to be flexible with payment options and its move to boost customer support in far-flung regions of the world means that it is closing the competitive gap.