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Aviation History
2002
2002 - 3135.PDF
COMMENT EDITORIAL +44 (20) 8652 3842 Quadrant House, The Quadrant, Sutton, Surrey SM2 5AS, UK Fax +44 (20) 8652 3840 email flight.internationambi.co.uk Editor Murdo Morrison +44 (20) 8652 4395 murdo.morrison9rbi.co.uk Editor's PA Debra Warburton (maternity leave) Acting Editor's PA Andrew Costerton •44 (20) 8652 3835 andrew.costerton@rbi.co.uk News Editor Emma Kelly •44 (20) 8652 3096 emma.kelly9rbi.co.uk Commercial Aviation Editor Max Kingsley-Jones +44 (20) 8652 3825 max.kingsley.jones9rbi.co.uk Defence Aviation Editor Stewart Penney +44 (20) 8652 3834 stewart.penney9rbi.co.uk Operations/Safety Editor David Learmount +44 (20) 8652 3845 david.learmount9rbi.co.uk Business Editor Alexander Campbell +44 (20) 8652 3990 alexander.campbell9rbi.co.uk Business & General Aviation Editor Kate Sarsfieid +44 (20) 8652 3885 kate.sarsrield9rbi.co.uk Reporter Justin Wastnage •44 (20) 8652 3B63justin.wastnage9rbi.co.uk Technical Reporter Michael Phelan +44 (20) 8652 3843 michael.phelan9rbi.co.uk Spaceflight Correspondent Tim Furmss +44 (1237) 471960 tim9spaceport.co.uk EUROPE/MIDDLE EAST European Editor Christina Mackenzie +33 (I) 64 23 68 89 christina.mackenzie9rbi.co.uk Israel Correspondent Arie Egozi +972 (3) 9413132 Middle East Correspondent Gerald Butt +357 22 771967 gbutt9spidernet.com.cy AMERICAS Washington DC Office Fax +1 (703) 836 8344 Americas Editor Graham Warwick +1 (703) 836 3448 graham.warwick9rbi.co.uk East Coast Editor Paul Lewis +1 (703) 8363084 jpaul.lewis9rbi.co.uk West Coast Editor Guy Norris •1(949)2528971 Fax+1 (949) 252 8972 guy.norris9rbi.co.uk Brazil Correspondent Jackson Flores Jr +55 212439-6062 Fax 00 55 212349-6090 fubar9uol.com.br Canada Correspondent Brian Dunn ASIA/PACIFIC Singapore Office Fax +65 6789 7575 Regional Managing Editor Nicholas lonides •65 6780 4311 nicholas.ionides9rbi.co.uk Deputy Asia Editor Andrew Doyle •65 6780 4309 andrew.doyle9rbi.co.uk Regional Reporter David fullbrook •65 6780 4314 david.fullbrook9rbi.co.uk Australia Civil Aviation Correspondent Paul Phelan +61(7)40532791 Fax+61 (7)40533003 pdphelan9optusnet.com.au Australia Military Aviation Correspondent Peter La Franchi •61 (0) 419 246 620 Fax +61 (2) 62312795 nutka9ozemail.com.au EDITORIAL PRODUCTION Group Production Editor Graeme Osborn +44 (20) 8652 3828 Group Art Editor James Mason +44(20)86524994 Chief Sub-Editor Chris Thornton +44 (20) 8652 4997 Deputy Production Editor Jackie Thompson +44 (20) 8652 3850 Sub Editor Megan Turner +44 (20) 8652 3848 Photographer Mark Wagner +44 (20) 8944 5225 Senior Technical Artist Giuseppe Picarella +44 (20) 8652 8054 Editorial Artist Tim Brown +44 (20) 8652 8043 WWW.FLIGHTINTERNATIONAL.COM Webmaster Sheena Buchanan +44(20)86524432 SUBSCRIPTIONS +44 (1444) 445454 rbi.subscriptions@rbl.co.uk THE FLIGHT COLLECTION kim.hearn@rbi.co.uk © and Database Rights 2002 Reed Business Information Ltd. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission in writing of the publishers -\J J online service at www.rati.com, contains the full text of Flight ^•B^M Internationaland Airline Business since 1996. Full text of the magazines can also be found online with Lexis-Nexis, Dialogue, FT Profile, IAC and Reuters. Editor Kieran Daly +44 (20) 8652 3837 Reed Business Information Chinese puzzle Embraer looks set to be the latest Western manufacturer to win a production deal with China. But can it succeed where so many have not? Seven years ago Boeing, the former McDonnell Douglas and some of the then Airbus partner companies were fighting for equity involvement in an ambitious project China was pursuing for the development of an all-new 100-seat jet-powered airliner. The three groups boasted publicly of the bright future for the project and said they were truly committed to making it work, should they win the bid to join China's state manufacturing group Aviation Industries of China (now separated into AVIC I and AVIC II) as an industrial partner. But a top Boeing China executive made some curious comments while the battle was taking place. When asked at a press confer ence in Beijing in October 1995 whether Boeing would, if rejected by the Chinese, try to build such a jet on its own, the executive said it was highly unlikely, even though he claimed there was a potentially huge market for such an aircraft in China and elsewhere in Asia. It is vital for Embraer to learn from the mistakes of its fellow manufacturers "We already make an airplane with around 100 seats," he said, referring to the smallest member of the 737 family. That comment was somewhat of a paradox. Boeing and the other major aircraft manufac turers were fighting publicly for participation in a programme that they claimed would be a huge success, while privately they knew it would probably never get off the ground. In reality it was a race in which the "winner"' would probably have been the ultimate loser. Airbus later went on to "win" the contest and worked with China on studies of what was dubbed the AE31X. But talks ultimately col lapsed in 1998 after the two sides failed to come up with a viable business case for the project. Airbus instead went ahead with a fur ther shrink of its A320 - the A318 seating just over 100 passengers. But few saw the European manufacturer as the loser, despite the fact that Airbus's move to build the A318 on its own upset many in China. As compen sation, Airbus handed more A320 wing work to China's state-run aerospace companies. China has long held ambitions to develop a modern airliner on its own and few observers doubt this will happen sooner or later. What is not clear is whether the resulting product will be desired in the marketplace. Now it appears history could be about to repeat itself as AVIC I prepares to launch its ARJ21 regional jet family - potentially in part nership with foreign groups - but there are important differences this time. Boeing has agreed to sign up as an engineering consul tant on the project but will not become a full partner. The question being asked now, as Embraer is closing on a separate deal with AVIC II covering the establishment of an ERJ-145 line in China, is whether the Brazilian manufacturer will be able to make a partner ship work in a country where so many other foreign groups have failed. In the 1980s and early 1990s, the world's major manufacturers fought for one of the first industrial partnership bids in China, the so- called TrunkLiner programme. McDonnell Douglas went on to win it, agreeing a deal to have MD-80/90s assembled from kits or built outright in China. McDonnell Douglas saw it as a major victory, believing it would lead to huge sales to the country's airlines, which it thought would effectively be forced to take hundreds of its twinjets. But Airbus and Boeing pursued a different route: they talked with the airlines directly, rather than only the government, about aircraft sales. As China's economy is planned, the government has the ultimate say on aircraft that may be operated, but airlines were at the time being urged to become more commer cially viable and were gaining more and more power in making operational decisions. Chinese airlines do not like being told which aircraft they should operate, and the MD-80/90s were as a result never seen as favourites. The TrunkLiner programme eventu ally died a quiet death, and Airbus and Boeing were the real winners, taking the bulk of the business in China. Does this mean that industrial partnerships in China cannot work? Probably not, but the problems McDonnell Douglas faced can and probably will arise again with other manufac turers. In China the market potential is so enormous that the manufacturers feel they have little choice but to work with the govern ment. After all, China's economy remains a planned one and is likely to stay that way for some time to come. But for Embraer it is vital that it learns from the mistakes made by some of its fellow international manufacturers. It cannot regard its "win" on AVIC ll's regional jet bid as one that will automatically lead to a flood of sales in China. SEE HEADLINES P5 AND FEATURE P42 www.flightinternational.com FLIGHT INTERNATIONAL 29 OCTOBER - 4 NOVEMBER 2002 3
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