Chinese joint venture company Harbin Embraer is looking for help from the Chinese government to complete potential launch deals for locally assembled ERJ-145s ahead of a mid-December roll-out, writes Brendan Sobie.
The two most likely launch customers, China Southern Airlines and Sichuan Airlines, are thought to have resisted ordering Harbin's ERJ because regional jet operations are currently unviable in China.
The Civil Aviation Administration of China (CAAC) is considering exempting regional operators from a 5% revenue-based fee covering air traffic control and other costs. It may also protect regional jet operations from competition by mainline operators.
Harbin is understood to be offering China Southern and Wuhan the same prices as the airlines' 2001 deals with Embraer for 20 and 10 145s, respectively, which the Chinese government refused to approve. The deals would avoid the 23% import tax on foreign-built regional aircraft.
China Southern, however, says the tax break is not enough, while Embraer will not offer Chinese ERJs at a discount as suppliers are charging more for the Harbin aircraft and Embraer needs to recoup start-up costs. Wuhan has indefinitely deferred any ERJ order because of its recent merger with China Eastern. Sichuan has expressed interest, but only if the operating environment changes.
The CAAC may issue regulatory changes early next year and give earlier guarantees of changes to entice an order before the Harbin roll-out. The Chinese government, which owns 49% of the venture, wants to avoid the embarrassment of a roll-out without a customer and is encouraging airlines to buy the local product. Harbin's plan to build 24 ERJs next year could be in jeopardy without early orders.
Source: Flight International
