Paul Lewis/BANGKOK
Aero International (Regional) (AI(R)) is aiming to finalise a comprehensive joint-venture agreement with Aviation Industries of China (AVIC) within eight months, covering not just local assembly of the ATR 72 turboprop, but also marketing and after-sales support for the aircraft.
The European consortium plans to build on its recent first sale of ten ATR 72-210As to China Xianjiang Airlines and develop a deeper long-term business relationship. "We must establish a long-term strategic alliance with China, if we want to develop this market," says AI(R) chief executive Patrick Gavin.
Discussions with AVIC focus on a phased transfer of assembly work to Xian Aircraft, in parallel with the development of a larger Chinese market for turboprops. Preliminary company projections suggest a requirement for up to 100 aircraft over the next ten years.
As part of the China Xianjiang deal, AI(R) has already contracted Xian as a second supplier of rear-fuselage section 16s for the ATR 72. "We consider that this agreement will be part of the joint venture. It's a first step," says Gavin.
The next phase of co-operation, now under negotiation, would involve the establishment of an ATR 72 assembly line to produce aircraft for Chinese airlines. AI(R), however, says that it is keen to avoid simply transferring work without having any responsibility for placing and supporting the aircraft with local carriers.
Gavin explains: "An assembly line represents a very high investment, but does not form a very large part of an aircraft, so we want to establish something more solid with China-We have to address the problem of image and integration in order to market and support an aircraft in China."
The proposed joint venture will accordingly play a full role in marketing and supporting locally assembled ATR 72s in China. The structure of the Sino-European company, furthermore, will be modelled on, and fully integrated with, AI(R)'s global organisation, such as its product-support centres in Singapore and Washington.
"We have to demonstrate that an aircraft produced in China will have exactly the same constraints in terms of airworthiness and quality-There is no reason, if we receive a warranty claim from a Chinese airline, that the carrier has to be treated differently from a US operator," says Gavin.
The joint-venture structure and shareholding has to still to be finalised, but is likely to be a 50:50 split between AI(R) and AVIC.
Source: Flight International
