Chinese government approval would set seal on sale of 25 ERJ-145s to China Southern Airlines and Wuhan Airlines

Embraer is awaiting Chinese government approval for a proposed joint venture that would establish an ERJ-145 final assembly plant in Harbin. The Brazilian manufacturer hopes the deal with Aviation Industries of China II (AVIC II) will give it the green light to complete the pending sale of 25 50-seat regional jets to China Southern Airlines and Wuhan Airlines.

The joint venture calls for the construction of a new facility adjacent to Harbin Aircraft Industries' plant in northern China, with work scheduled to begin as early as this year. The focus would initially be on the final assembly ofERJ-145s for the local airline market, with limited subcontracting production.

Major components and subassemblies would be shipped to China from Embraer and its various partner suppliers in the near term, "but following a natural evolution in manufacturing, we will eventually make aircraft in China", says Mauricio Botelho, Embraer president. The amount of work performed locally will hinge on the demand from Chinese carriers.

It is understood that negotiations between Embraer and AVIC II are nearing completion, but the joint venture can only proceed once the Chinese government gives its approval.

Embraer has been awaiting Beijing's blessing for more than 18 months to complete the sale of 20 ERJ-145s to China Southern, plus 10 options, and another five to Wuhan Airlines. The company has even completed the first aircraft, which is now parked at its Sao Jose dos Campos plant. Sichuan Airlines was the first local carrier to introduce the 50-seat jet into the Chinese market and now operates a fleet of five.

AVIC II has been simultaneously negotiating with several regional jet manufacturers to produce a 35-50-seat jet in China, while AVIC I is pursuing its own larger 70-90-seat ARJ21 development.

The Embraer deal with AVIC II, if approved, would throw into doubt an earlier deal between Harbin Aircraft and Alliance Aircraft to jointly develop the 35-seat SL-100-30. Fairchild Dornier, before its recent difficulties, had also been offering to co-produce the 55-seat 528JET with China.

Source: Flight International