Airbus Industrie Asia (AIA) is not now expected to reach a full agreement with Aviation Industries of China (AVIC) and Singapore Technologies (ST) on the joint development of the planned AE-100/A318 until the end of the year.
The three sides are hoping to sign a "framework agreement" by mid-May. It is not planned to begin preliminary development of the new 100-seater aircraft until after a full business agreement is inked, however. According to Chinese sources close to the negotiations, this will take at least until the end of 1997 to conclude.
This could affect the AE-100's five-and-half-year development schedule. AVIC last stated in November 1996 that it had hoped to reach an outline agreement by the end of 1996, or early this year, and planned to deliver its first aircraft as early as 2002.
Talks have been continuing for nearly ten months, but have been complicated by the establishment of the Airbus Industrie/Alenia subsidiary, AIA, to replace Aero International (Regional) (AI(R)). The AIA team did not begin meeting AVIC and ST until February, and has been occupied in reviewing progress made with AI(R) (Flight International, 5-11 March).
The provisional agreement, targeted for May ,will attempt to flesh out AI(R)'s earlier letter of intent signed with AVIC in June 1996. It will include a legal framework, an outline on the joint venture's shareholding and a genera l understanding on workshare.
It is already agreed that the as-yet-unnamed Sino-European-Singapore joint venture will be legally registered in Hong Kong, for fiscal convenience.
The actual programme headquarters, though, will be co-located with the AE-100/A318 final- assembly line in China, which, although not yet officially confirmed, is almost certain to be in Shanghai.
The agreement is also likely to re-iterate the now widely known equity division, with AVIC holding the largest stake, with 46%. AIA has 39% and ST holds 15%, of which 5% will be subcontracted to Taiwan's Aerospace Development Centre. While there is broad agreement on areas of responsibility, such as final assembly in China, detailed arrangements on component and accessory workshare will take until early 1998 to finalise.
There is also the continuing problem of fine-tuning the size of the proposed aircraft. AVIC has continually talked of a three-member AE-100 family, spanning 90-140 seats. AIA is keen to avoid any overlap with the existing Airbus A319, and instead refers to the tentatively designated A318 as a 100- and 120-seat-sized aircraft.
Source: Flight International
