Aircraft assembly in Asia is not on the cards for Boeing, with the US airframer learning from McDonnell Douglas's failed venture in China that such projects come with great risks.
McDonnell Douglas, which Boeing acquired in 1998, had a long-running programme of airliner production in China. This started with the MD-80 and led to the Chinese "Trunkliner" programme in the 1990s that envisaged the production of 40 MD-90-30Ts by Shanghai Aviation Industrial. However, low demand meant that only two aircraft were ever assembled, and the programme was eventually cancelled in 1998 at the Chinese government's request.
Some now believe that it makes sense for airframe manufacturers to assemble entire aircraft in Asia, given the lower costs that the region could offer. But Larry Dickenson, vice-president for sales at Boeing Commercial Airplanes, says that this is not his company's view.
"We did not do well in China with McDonnell Douglas and I'm not sure if we'd be keen on doing something similar again," says Dickenson. "We have totally changed the way that we are involved in China and the region."
Outsourcing the production of aircraft components, which Japanese manufacturers do for the Boeing 787, and the maintenance, repair and overhaul joint ventures in China and India, are very successful investment strategies, he adds.
Rival Airbus is pressing ahead with plans to assemble its A320 series of aircraft in Tianjin, China. Some believe this could be a precursor to its eventual involvement in Beijing's plans to produce its own large aircraft, after its successful production of the ARJ21 narrowbody. Interestingly, the manufacturing processes and systems that were used for the MD-90 are now being applied to the ARJ21 programme.
Dickenson, who had formerly worked for McDonnell Douglas, says: "You know, Airbus tried to assemble aircraft in China many years ago and that did not work out too well. Boeing has certainly learnt a lesson from such a venture. We're sure that China has the capability to build a new aircraft without much help from outside. For now, we're too busy with our programmes to join a new project with China."
The manufacturer's sales focus, though, is firmly on Asia. Boeing forecasts that the Asia-Pacific will account for 29% of sales in 2020, just behind the USA which is projected to account for 32%. The preponderance of widebodies among Asian orders, however, means that manufacturers will make more money from the region.
China's rising passenger numbers and growing wealth make it a crucial market, and Dickenson points out: "It's interesting that two of the most successful airlines in the world, Cathay Pacific and Singapore Airlines, are trying to make inroads there. They've realised that the mainland is very important and it will become even more crucial."
Source: Flight International