China has approved plans for a merger of state aerospace giants China Aviation Industry Corporation I and China Aviation Industry Corporation II, nine years after the two companies were created from a split of the former Aviation Industries of China.
The official Xinhua news agency says China Aviation Industry Group Corporation is the new company that will be formed from what it says will be the "remerging" of AVIC I and AVIC II, which together employ hundreds of thousands of people.
It says the government has approved a "preparation group" for the enlarged company that is led by AVIC I's general manager "and the new company is expected to be officially inaugurated in July".
In January reports first surfaced that discussions were being held on the possible merger of some or all of AVIC I and AVIC II in a move linked in part to the country's aim to develop large commercial aircraft. China recently established a new company to oversee the development of aircraft seating at least 150 passengers and both AVIC I and AVIC II are shareholders.
It remains unclear whether all of the many divisions of AVIC I and AVIC II will merge or whether the merger will encompass only some of their operations, such as only civil businesses or their extensive military businesses.
AVIC I and AVIC II were formed from the split of AVIC in the middle of 1999, which was an enormous holding company with a combined workforce of more than 500,000 people. It manufactured a large variety of aerospace and non-aerospace products, such as civil and military aircraft and aero-engines, missiles, automobiles, motorcycles, buses, air conditioning equipment and textile machinery.
AVIC I today has 240,000 employees and assets of more than 100 billion yuan ($14.5 billion). One of the company's most high-profile civil aviation projects is the ARJ21 90-seat regional jet, which is being prepared for its first flight.
AVIC II has more than 200,000 employees and assets of 31.5 billion yuan. Its civil aircraft work is based largely around general aviation and turboprop passenger aircraft production, in addition to a joint venture with Embraer under which the Brazilian company's ERJ-145 regional jets are produced in China.
Both AVIC I and AVIC II are also partners with Airbus in a plan to assemble A320-family aircraft in China.
Source: Flight International
