The European aerospace industry is flexing its muscles in the wake of the Fokker collapse with an apparent double success in China and the emergence of a real challenge to the monopoly of the B747. Equally significant, the Dutch manufacturer may yet see in 1997, as it continues the search for a partner.

Politics certainly had a large role to play in Airbus winning a $1.5 billion order for 30 A320s from China Aviation Supplies Corporation - the European consortium's first major breakthrough in China. The deal was signed during Chinese premier Li Peng's recent European visit. Analysts point to the recent tension between China and the US over Taiwan and suggest the timing of the order is one way of showing that China is not solely dependent on Boeing and McDonnell Douglas. Nevertheless, Airbus has worked hard to get its foot in the door of such a lucrative market, including a $50 million training and spare parts centre in Beijing due to open in October.

The other fillip to European aircraft builders from Li's visit came in the signing of a letter of undertaking between Aviation Industries of China and Aero International Asia on the development of the AE-100 regional jet. AIA is the Beijing-based consortium set up by AI(R) partners Aérospatiale, Alenia and British Aerospace in January to challenge the US manufacturers to partnering China (and possibly Korea) in manufacturing the aircraft. The letter gives the European camp a psychological boost over their US rivals but it only commits to continuing negotiations with AIA and by no means excludes Boeing or McDonnell Douglas.

In a busy April, Airbus also created a Large Aircraft Division under the leadership of Jürgen Thomas, with the aim of having the 500-seater plus A3XX in service by 2003. His priorities include refining the market studies undertaken so far and defining the basic specifications of the aircraft. Airbus is aiming to break Boeing's monopoly on the 'big-end' of the market.

Airbus admits it would like to be able to develop the A3XX project as an integrated company, instead of under the current loose partnership structure of the consortium. Aérospatiale has joined its other main partners - Dasa and British Aerospace - in supporting the idea of setting Airbus up as a limited company. The main benefit would be to cut the cost of producing aircraft, as Airbus would have a free hand to source from suppliers and would generate economies of scale through central purchasing.

Meanwhile, struggling Fokker may yet have the time to find a partner. Airline customers, like Alitalia and British Midland, are clamouring for the manufacturer to complete all its outstanding orders or their fleet planning will suffer. The Dutch manufacturer only intends to deliver 15 further aircraft, which include only one of 10 F70s still due to Alitalia and none of the four on order from the UK independent.

The receivers appear prepared to keep Fokker building aircraft if it can secure bank guarantees and 'substantial' downpayments from the various airlines. This would see the Dutch manufacturer survive into 1997 and would relieve the time pressure which has hindered the search for a partner. Currently a consortium of the Russian aircraft builders Tupolev and Yakovlev is in talks about a possible venture and separately a Dutch industrialist is also looking to put together an international rescue package.

Mark Odell

Source: Airline Business