Deals for locally developed ARJ21s and built ERJ-145s expected at Aviation Expo China

Regional jet deals are expected to dominate the Aviation Expo China exhibition in Beijing this week, with launch orders due for the Chinese-developed ARJ21 and possibly the locally produced Embraer ERJ-145.

Industry sources say AVIC I Commercial Aircraft Company (ACAC) will announce commitments for its ARJ21 on 17 September. Sources say launch customers that may be named this week include Shanghai Airlines, Shandong Airlines and Shenzhen Financial Leasing. The latter is China's first leasing company, which was established in 2000 by local financial institutions and specialises in leasing locally produced turboprops to domestic carriers.

Shanghai Airlines last week announced its intention to acquire ARJ21s, although it has only made a tentative commitment and ACAC has not yet confirmed the deal. Shanghai says it plans to acquire five of the type - three in 2008 and two in 2009.

The 78-85 seat ARJ21 should be available for delivery from late 2007. The aircraft will be built by ACAC, a subsidiary of China Aviation Industry Corp I (AVIC I), one of two state-owned manufacturing groups. The other, AVIC II, has a joint venture through subsidiary companies with Embraer covering the production of ERJ-145s.

Launch orders for ERJ-145s assembled by joint venture company Harbin Embraer Aircraft Industry are expected as early as this week. Sources say customers may include China Southern Airlines and Sichuan Airlines. Harbin Embraer has been in talks with both carriers for some time.

Sichuan Airlines is the only current Chinese operator of ERJ-145s, having purchased five directly from Embraer. China Southern committed to buy 20 Brazilian-built ERJ-145s from Embraer in 2001 but the Chinese government did not approve the deal.

Sources say China Southern held talks to convert some or all of that old provisional order into firm commitments for aircraft produced in China. Harbin Embraer plans to roll out its first aircraft in December.

The Chinese government is encouraging Chinese carriers to order locally produced regional jets as part of a dual strategy to create a hub and spoke system in China and develop its aircraft manufacturing capability.

The government has blocked all regional jets sales since 2001 through taxes on imported aircraft weighing under 25,000kg. This has created pent-up demand for regional jets, which is expected to further increase as Chinese airlines consolidate and improve services to the rural western parts of the country.


Source: Flight International