China Aerospace - Business Structure and Market

Opportunities

Nigel Gibbons

UKTI Aerospace Supply Chain Project

Aerospace Market Overview

Aerospace Sector

Aircraft Programmes

Opportunities

TOPICS

AEROSPACE MARKETOVERVIEW

Air Passengersalmost 20% rise in Domestic passengers in H1 2009

20% of USA today – 50% by 2026

Airlines40 Domestic Airlines (10 State Owned)

Consolidating Airlines

Commercial AviationAveraged double-digit growth for past 30years

Domestic air travel forecast to grow by 11% p.a. to 2020

AEROSPACE MARKETOVERVIEW

Boeing – China to triple its fleet by 20283,770 new aircraft required

AVIC – predicts 3,815 new aircraft2,822 ‘large’ aircraft (>150 seat)

993 regional aircraft3,000 civil helicopters (<200 today)

243 new aircraft deliveries in 2009largest of any one country!

‘ The main goal is to upgrade the countries industrial structure in

order to make China an Innovation-Driven economy by 2020 ’

China’s Outline of National Medium and Long Term Science and Technology Development Plan (2006-2020).

China’s 11th Five Year Plan(Until 2010).

Civil Aerospace Investment = $29 billion

AEROSPACE SECTOR

Commercial Aircraft Corporation of China Ltd(COMAC)

• AVIC I Commercial Aircraft Company (ACAC)• Shanghai Aero-Engine Manufacturing Plant• Shanghai Aircraft Manufacturing Factory (SAMF)• Shanghai Aircraft Research Institute (SARI)

• ‘ABC’ Airbus, Boeing, COMAC

• Established 2008

• Capital 19 Billion RMB ($2.8 billion)

• Stakeholders: Asset Supervision and Administration Commission,

Shanghai Guo Steel Group, AVIC, Bao Steel Company, China Aluminium,

and Sinochem.

• Focus: Aircraft Development; Systems Integration; Marketing; Customer

Service; Certification.

• Building Three Centres in Shanghai: R&D Centre (5000 employees),

Final Assembly (15000 employees); Customer Service

AEROSPACE SECTOR

Chinese Aviation Industry Corporation(AVIC) Companies

• Chengdu Aircraft Design Institute (CADI)• Chengdu Aircraft Industries Group (CAC)• China Air-to-Air Missile Research Institute• China Flight Test Establishment (CFTE)• China Gas Turbine Establishment• Guizhou Aviation Industries Group Co (GAIGC)• Shanghai Aero-Engine Manufacturing Plant• Shenyang Aero-Engine Research Institute• Shenyang Aircraft Industries Group (SAC)• Shenyang Liming Engine Manufacturing Corporation (LM)

• Xian Aero-Engine Corporation (XAE)• Xian Aircraft Design and Research Institute (XADRI)

• Xian Aircraft Industries Group (XAC)

• Baoding Propeller Factory• Chengdu Aircraft Industries Group (CHAIG)• Changzhou Aero-Engine Factory (CAE)• Chengdu Engine Company (CEC)• Chinese Helicopter Research and Development Institute (CHRDI)

• Dongan Engine Company (WJ5/DEC)• Harbin Aircraft Industries Group (HAC)• Hongdu Aviation Industries Group (HAIG)• Shaanxi Aircraft Industries Group (SAC)• Shijiazhuang Aircraft Industry Corporation (SAIC)

• South Aero-Engine Company• Zhuzhou Aviation Power Plant Research Institute

• Sale Revenue $22 billion• Employees: >430,000 • 101 Large/Medium Sized Companies• 34 Research Institutes• Capital 64 Billion RMB ($9.5 Billion)• 10 Business Groups

AEROSPACE SECTOR

COMAC; GE

Harbin Aircraft Industries Group

Shenyang AircraftCorporation;Shenyang Liming Aeroengine Group

A320 FALC

Hongdu AviationIndustries; ChangheAircraft; China SouthAviation

Chengdu – CAC; Sichuan Chengfa

Xian – XAC; XAE;Quingan; AECC

AEROSPACE SECTOR

Guizhou AviationIndustry Group

TAECO; GE

GAMECO; HAESL

AEROSPACE SECTOR

Foreign companies:

AIRBUSA320 FALC in Tianjin - 1st assembled A320 rolled in May09

11 deliveries in 2009A320 full wing equipping & testing by AVIC XAC (Xian)

5% of A350 aerostructure in China$200M procurement expected in 2010 & $450M by 2015

BOEINGChina supplies to all Boeing models

B787 – Rudder, wing-to-body fairings & fin leading edge panelsActive contracts valued at over $2.5B

AEROSPACE SECTOR

Foreign companies:

ROLLS-ROYCE40yrs in China

Close relations with CAAC, other Govt Ministries & AVICJV’s – Xi’an Aero-components (XRA)

& Hong Kong Aero-Engine Services (HAESL)Jt research with Chinese Academy of Science (CAS)

GE AVIATIONGE Aviation & Unison in Suzhou

Structural components; actuation; composites; engine components

MRO facilities in Xiamen

AIRCRAFT PROGRAMMES

C919 Large Jet (156 seat, 168 seat, and 180 seat)

• First test flight in 2014.

• In service by 2016.

• Investment $8 Billion.

• 2,000 aircraft over 20yrs

• Domestic Fuselage Supplier Selected–include; Shenyang, Chengdu, Xian, and Hongdu Aircraft Companies

• 1st Tier Suppliers of Airborne Systems and

• Power will be from Overseas.

• 1st Tier RFI Sent Out 26/2/09

• 2nd and 3rd Tier Selection Next Year.

ARJ21 70–90 Seat Twin Turbofan.

First Flight - November 2008 in Service 2010/11

Certification Assisted by Alenia

211 Jets Ordered

AIRCRAFT PROGRAMMES

AIRCRAFT PROGRAMMES

OPPORTUNITIES

1st Tier Systems – Selection late 2009

2nd and 3rd Tier Systems -

Included on the Catalogue – COMAC R&D Department

CFM International (GE-Safran JV) Leap-X engine chosen for C919

Value - $10bn

Agreed to setup Assembly plant in China

C919 - Selection Process and Criteria:-

• Foreign suppliers should have a long term view of collaboration with a Chinese Firm.

• Bid for work as a JV/Cooperation with ChinesePartner (AVIC Company).

• COMAC will sign major systems and sub-system contracts with 1st and 2nd Tier only.

• Suppliers on ARJ21 will have an advantage

OPPORTUNITIES

OPPORTUNITIES

AVIC companies:-

• keen for further subcontract work from international customers

• welcome partners to develop product quality, approvals & management systems

• sourcing problems for aerospace grade materials, fastners etc. provide opportunity for UK suppliers

• Shaanxi Aircraft company welcome partners to work on improving their cockpit design capability for regional transport aircraft

• Guizhou Aviation Industry Group want partners on design & development of General Aviation Aircraft

Thank you!

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