Embraer expected to seal strategic joint venture with AVIC II at November air show

Embraer and China Aviation Industry Corp II (AVIC II) are expected to firm up a strategic joint venture in November on setting up an Embraer ERJ-145 assembly line in China.

The two have long been in talks on production of the 50-seat regional jet aircraft in China. State-run media now say Chinese central government approval has been secured, allowing contracts to be signed at the Zhuhai air show which starts on 4 November. The joint venture will be located in Harbin, with the first aircraft to roll out as early as 18 months after a formal contract signing.

Embraer says talk of a firm agreement on the venture is premature: "We are pursuing our negotiations with the Chinese, and are still seeking a detailed agreement to give us full go-ahead for this programme."

Embraer hopes the tie-up will boost its sales fortunes in the region. To date, its only Chinese airline customer is Sichuan Airlines, which operates five ERJ-145s. Conditional deals with China Southern Airlines and Wuhan Airlines have been delayed for 18 months by lack of final regulatory approval. Some aircraft have already been built and are stored at Embraer's plant in S‹o Jose dos Campos awaiting approval.

China's two main state-owned aircraft manufacturing groups, AVIC I and AVIC II, have for years been seeking foreign partners for regional jet development projects. AVIC II has been looking for a partner to help build a 30-50-seat aircraft in China, and AVIC I has been seeking to develop a 70-seat plus regional jet aircraft dubbed the ARJ.

If formalised, the Embraer venture will be only the second major assembly deal between China and a western manufacturer in 10 years. The first was the now-defunct TrunkLiner between AVIC I subsidiary Shanghai Aviation Industrial and the former McDonnell Douglas in 1992, covering MD-80/90 production. Airbus partners later talked of developing a new 100-seat aircraft with China but scrapped the plans in 1998.

The Civil Aviation Administration of China and other government agencies have been calling for China's carriers to add regional jets to build a US-style "hub-and-spoke" route network.

Source: Flight International