NICHOLAS IONIDES / SINGAPORE
But Chinese government keeps aviation giant's military operations under state control
Chinese state-owned manufacturing giant China Aviation Industry II (AVIC II) is planning a Hong Kong flotation to help it become more competitive internationally.
The move has won government approval, state-run media say. A new shareholding company is to be established within two months, although military manufacturing is excluded as it is "not suitable for public listing", officials say. The company hopes a Hong Kong listing will "make it competitive in the global market". The amount expected to be raised and the percentage to be floated are not yet known.
AVIC II was formed in 1999 when Aviation Industries of China divided into two groups. AVIC I focuses on large and medium-sized aircraft, while AVIC II focuses on smaller aircraft and helicopters.
Both are huge conglomerates. AVIC II has 210,000 employees and 81 "member companies", including research institutes, while assets are said to be worth around 31.5 billion yuan ($3.8 billion). As well as its aerospace-related businesses, AVIC II produces pharmaceutical and medical equipment, industrial gas turbines, automobiles, motorcycles and related engines, and other consumer goods.
AVIC II's aviation interests focus on military and civilian turboprop aircraft, helicopters, trainers and unmanned air vehicles. Commuter aircraft produced by AVIC II subsidiaries include the Harbin Y-12 and Shaanxi Y-8. AVIC II has been in talks with potential foreign partners for a planned 30 to 50-seat regional jet aircraft.
AVIC II said early this year it had won state approval to select a foreign partner within months, but none has been chosen. AVICII includes Hongdu Aviation Industry, which makes the N-5A agricultural aircraft and CJ-6A primary trainer, and partners Pakistan Aeronautical Complex on the K-8 Karakorum basic jet trainer.
Jingdezhen Helicopter (formerly Changhe Aircraft) developed the Z-8 heavy transport and Z-11 light multi-purpose helicopters.
Shijiazhuang Aircraft Manufacturing makes the Y-5B utility, and W-5A, W-5B and W-6 light aircraft and China National South Aero Engine produces piston, turboshaft and turboprop engines.
ADDITIONAL REPORTING BY ANDREW DOYLE
Source: Flight International
