Moo-Sung Yu, president of Samsung Aerospace, confirms that the crucial issue of where aircraft will be produced is the major stumbling block between the Korean consortium led by Samsung and its would-be partner, Aviation Industries of China (Avic). The Koreans want a second production line in Korea, whereas the Chinese are insisting upon a single line in China. Following 18 months of talks, Yu says there have been no direct discussions since the end of last year.
Yu also says the Korean consortium was not involved in talks with Singapore Technologies, which has agreed to partner Avic. Singapore Technologies says: 'Avic will be the biggest shareholder and lead member of the 100-seat aircraft programme,' adding: 'The final assembly line will be in China.'
This conflicts with the outline agreement between Korea and China, which called for the two major partners to have equal 35 per cent stakes, with 10 per cent reserved for other Asian partners and 20 per cent for western companies. Korea's options seem to be to pull out or to accept a smaller stake with no production line. Other potential Asian partners include Taiwan Aerospace, Hindustan Aeronautics of India, and Indonesia's IPTN, which is studying an 80-130 seat jet, the N-1300.
The AE-100 will cost at least $2 billion to develop. Yu says there is a market for 800 to 1,000 air craft in this class over 15 years, with China's carriers needing 300 to 400 and Korea's 60 to 100. Rumours suggest that the front-runners for the western element are Boeing and Aero International (Regional), but McDonnell Douglas' general manager commercial marketing John Feren says: 'Nobody has notified us we're out of it.' The bid from Dasa and Fokker is likely to be ruled out, at least until Fokker's problems are resolved.
Singapore Technologies says that the western partner will be expected to make sure that the new aircraft complements current products, as well as ensuring that it meets western airworthiness standards. 'Commonality with other commercial aircraft will be an important consideration to minimise costs.'
Boeing may be able to provide some commonality with the 108-132 seat B737-500, but the B737 has a six-abreast cabin against the AE-100's proposed five-abreast layout. AIR has the four-engined Avro RJ, but the new aircraft will be twin-engined. And although AIR is looking at a 70-seat jet in a market study driven by the renegotiation of the US majors' union scope clauses to permit their regional affiliates to operate larger jets, this is likely to be very different from a 100-seater, with a four-abreast cabin. Feren says the AE-100 will complement the MD-95, which will enter service in 1999 with the Asian jet due to be introduced several years later.
Inevitably, the fate of Fokker is linked closely to the AE-100. If a buyer for Fokker emerges, it will be a strong contender for the Chinese partnership. AIR's shareholders, Aérospatiale, Alenia and British Aerospace, have pledged to keep the door open for Dasa to enter the fold should the AIR bid succeed.
Source: Airline Business
