AVIC II forecasts civil inventory will leap by 1,800% over the next 20 years

Domestic and foreign helicopter manufacturers are looking to boost sales and increase production rates in China, which is likely to become the worth's largest growth market in the civil sector.

One report released in Zhuhai last week by AVIC II, the state-owned aviation conglomerate and China's sole helicopter producer, suggests the civil helicopter inventory will grow from about 140 at year-end 2005 to 2,763 by 2026 - a jump of 1,800%.

AVIC II senior vice-president Liang Zhenghe says demand will be driven by security services, the energy industry and environmental monitoring agencies. The 2008 Beijing Olympics and 2010 International Exposition in Shanghai will also be factors.

The domestic industry, which has produced 800 helicopters in the past 50 years, appears set for a boom. AVIC II plans to pour more than 3 billion yuan ($380 million) into research and development and joint partnerships with foreign manufacturers from 2006 to 2010. "We will find out what our clients want, and work on meeting those needs," says Liang.

The market could be bigger if several reforms take place, says Wang Bin, president of AVIC II subsidiary Jiangxi Changhe Aircraft. These include freeing up airspace from military to civilian control, opening more maintenance facilities, and increasing pilot training.

"The potential for local demand is high, but we should not look within China only," says Wang. "Our company has the potential to develop different categories of helicopters, and we should market these to other countries too."

Foreign manufacturers such as AgustaWestland, Eurocopter and Sikorsky are also keen. Some are looking to set up Chinese joint ventures to take advantage of low production costs and get into the domestic market.

Eurocopter leads with about 50% of the market, and has been in China for over two decades. It is jointly developing and manufacturing the EC175 with AVIC II, with production targeted for 2008. It licence-produced the Dauphin in the 1980s and worked with AVIC II on the EC120 in the 1990s.

"We have had a long experience in China," says vice-president for sales in Asia Norbert Ducrot, who hopes to sell at least 25 helicopters to China in 2006.

"The Chinese have, over time, recognised the quality of our helicopters. That has given us a big boost in the market, which is possibly the most exciting in the world."

Source: Flight International