China Aviation Industry Corp 1 (AVIC 1) is restructuring its commercial aircraft business, with subsidiary Xian Aircraft playing a leading role.

Xian’s listed subsidiary Xian Aircraft International is now the biggest shareholder in the newly created commercial aircraft companies of two other AVIC 1 subsidiaries, Shenyang Aircraft and Chengdu Aircraft.

Xian Aircraft International is listed on China’s Shenzhen stock exchange, so AVIC 1 can raise capital to finance the development of its commercial aviation businesses. Chinese state media earlier this month reported that Xian Aircraft International plans to raise more capital through the sale of new shares and this money will be invested into Chengdu Commercial Aircraft and Shenyang Commercial Aircraft.

AVIC 1 executive vice-president Hu Wenming says AVIC 1 is “using Xian Aircraft International as the platform to integrate the commercial capabilities of the group”. Xian Aircraft International has a 45% stake in each of Shenyang Commercial Aircraft and Chengdu Commercial Aircraft. AVIC 1 made Chengdu Aircraft and Shenyang Aircraft spin off their commercial arms into separate businesses in order to create more separation between civil and military work.

Hu says AVIC 1 has a strategy to develop “centres of excellence” and adds that all future aircraft programmes will follow the same collaborative approach of China’s ARJ21 regional jet programme. This means rather than have one factory produce a particular aircraft type, there will be several AVIC 1 factories producing major parts for the aircraft.

Hu says all future commercial aircraft, including the 150-seat commercial jet that China plans to build, will have the same “centres of excellence”, meaning Chengdu Commercial Aircraft will make the nose, Xian Aircraft the main fuselage and wings and Shenyang Aircraft the empennage.

This will also apply to subcontract work that AVIC 1 factories carry out for western aircraft makers. For example, Xian Aircraft will manufacture wings for western aircraft makers, says Hu.

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Source: Flight Daily News

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