Paul Lewis/SEOUL
SOUTH KOREA IS pushing to reach an agreement with China by mid-November on the selection of a Western partner to help develop the planned Airexpress AE-100 passenger jet.
The Korean Commercial-Aircraft Development (KCDC) consortium and Aviation Industries of China (AVIC) are under pressure to resolve several major outstanding issues, including a third partner, before Chinese President Jiang Zemin's visit to Seoul from 13-17 November.
"At the Government level, both countries expect certain documents to be concluded and signed," says Yi Taek Shim, executive vice-president of Korean Air Aerospace division and a member of the KCDC team.
Shim, however, admits to be being a "little confused" by AVIC president Zhu Yuli's statement in October that a decision had again been pushed back until the end of the year. The selection of a partner had originally been timetabled for the end of September.
Four competing proposals have been submitted. Shim suggests that Boeing and the Aerospatiale-led consortium, including British Aerospace and Alenia, are the more serious contenders and that the submissions made by McDonnell Douglas and Daimler-Benz/Fokker are regarded more as "expressions of interest".
Considerable differences exist between the proposals submitted and China and South Korea's stated requirement for a full financial-risk-sharing partner. Boeing and the European consortium are instead offering to sell key technology in exchange, respectively, for a 20% or 30% equity stake in the Airexpress project.
Aside from selecting a Western partner, South Korea and China also need to reach agreement on where the AE-100 aircraft will be produced, the workshare and the location of a proposed joint design centre.
Both countries have been pushing for final assembly, but China's larger market requirement for around 250 aircraft, against South Korea's projected need for 70-80 jet airliners, appears to give it the upper hand. Shim, however, argues that quality, efficiency, management capability and credit are also major factors which need to be considered.
To improve co-operation and communications between KCDC, AVIC and the yet-to-be selected Western partner, the two sides are also looking to establish a joint design centre. Suggested third-party "neutral locations" include Hong Kong, Singapore, or either Toulouse or Seattle.
Source: Flight International
