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Difficult journey

Competition is heating up in the regional-jet market.

Paul Lewis/SINGAPORE

THE RACE TO build Asia's first regional passenger jet is warming up, with as many as four competitors now in the contest. Given the hefty entry fee demanded of newcomers and the limited worldwide demand being projected, China, Indonesia, Japan and South Korea all face a hard road ahead.

Recent forecasts from the three Western major airframe manufacturers indicate that the market over the next 20 years will not support the number of regional-aircraft types now being proposed. For those programmes which can last the distance, the rewards will be small.

This has not deterred Samsung Aerospace from making a last-minute bid for Fokker Aircraft. The move reflects a national desire to become a worldwide aerospace player by 2005. Success would also satisfy a South Korean urge to thumb its nose at one-time partner China (Flight International, 21-27 August, P4).

Buying the bankrupt Dutch manufacturer would give South Korea immediate access to an existing product line and a short cut to developing a new aircraft in the form of the Fokker 130. Because the final 15 aircraft are nearly complete and key engineering staff are fast dwindling in number, Samsung has little time to strike a deal.

It is estimated that the rescue package, including production of another 20 Fokker 70/100s and the completion of the 130's development, will not leave much change out of $1 billion. Samsung is hoping for state assistance in the form of funding originally set aside to underwrite 50% of South Korea's share of the Chinese AE-100 programme.

FOKKER CONDITION

The Fokker 130, unlike the earlier AE-100, would be produced in South Korea and so meet the Government's earlier precondition for funding. Its status as a national programme, however, would also hinge on the willingness of other members of the 14-strong Korean Commercial Aircraft Development Consortium (KCDC) to participate.

Traditional South Korean corporate rivalry and underlying resentment at Samsung's increasing assertiveness has led many senior Korean Air and Daewoo Heavy Industry officials to dismiss the Fokker proposal as a non-starter. They would prefer instead to co-operate on a proposed smaller, 70- to 84-seat, development with either Aero International (Regional) (AI(R)) or, possibly, Saab Aircraft.

The prospect of Fokker being rescued is viewed with concern by former suitor Aviation Industries of China (AVIC), with one Chinese source warning "-there is a danger that it could mess up the market". Officially, the door remains open for the KCDC to rejoin the AE-100 venture, but, with final take-it-or-leave-it offer of only 15%, the chances of a Sino-Korean rapprochement appear slim.

AVIC and Singapore Technologies are focusing their attention instead on widening European participation to include Airbus Industrie. It is hoped to reach a broad agreement on a range of issues by the end of September, including the joint venture's shareholding and management structure, its legal and tax status and the size of aircraft to be built. A five-and-half-year development programme is expected to begin in January 1997, with the first AE-100 tentatively due to be flown in 2000 and to enter service in 2002. More talks are needed to sort out workshare, but it is broadly agreed that the aircraft will be assembled in China, with subassemblies coming from Europe, and Singapore providing subsystem integration.

JAPANESE RESPONSE

In response, Japan has been attempting to breathe new life into its own regional-aircraft ambitions. Japan Aircraft Development had originally set its sights on development of the 90- to 110-seat YS-X, with the assistance of Boeing. Industry attention has recently turned to a possible smaller-size collaboration with Bombardier, having concluded that the home-build project was no longer economically viable.

Discussions are understood to revolve around two low-cost Bombardier studies, internally designated BJY 90 and BJZ 120, of a next-step development to the planned 76-seat CRJ-X. The five-abreast design would incorporate Mitsubishi's supercritical wing, developed for the Bombardier Global Express business jet, and twin rear-mounted engines.

Bombardier is known to be holding talks with Boeing on its low-cost small-aircraft study, raising the prospect of a three-way tie-up with Japan. The study centres on three different models in the 90- to 115-seat category.

Indonesia's Industri Pesawat Terbang Nusantara (IPTN) is determined to field its own indigenously developed N2130 regional jet by 2004. Indonesia, having spent $1.6 billion to establish IPTN and develop the 64- to 68-seat N250 turboprop, views the N2130 twinjet as the next logical step. The $2 billion programme relies heavily on presidential patronage. Recent political unrest in Jakarta has left many of IPTN's rivals watching the future make-up and direction of the Indonesian Government.

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