Leading US aircraft maker Boeing signed a memorandum of understanding Thursday with two of China's largest aviation firms to supply parts for its aircraft, including the next-generation 7E7 Dreamliner jet. The deal is a breakthrough for China's aviation sector, with the two manufacturers the first in China to participate in the 7E7 program.
Boeing also said that it hopes to receive orders this year from Chinese airlines for its 7E7, a medium-size, fuel-efficient plane.
"We had good discussions with Chinese airlines," said Jim Morris, senior vice president of Supplier Management for Boeing Commercial Airplanes, at yesterday's signing ceremony. “It is our hope that we can place solid orders with them by the end of the year.”
Boeing has pinned its hopes on using the 7E7 to beat back competition from Europe's Airbus, which is vying to dominate the market with its double-decker 555-seat super-jumbo A380.
The 7E7 is scheduled for delivery in mid-2008.
According to the MOU, Chengdu Aircraft Industrial (Group), an affiliate of China Aviation Industry Corporation I (AVIC I), will supply the 7E7's rudder.
Hafei Aviation Industry, a subsidiary of China Aviation Industry Corporation II (AVIC II), will produce metallic and composite parts and assemblies for the 7E7 and other planes.
Morris added that Boeing and its global suppliers will discuss in the coming months what specific parts Hafei can contribute to the 7E7 program.
He also said that Boeing is expected to finalize contracts with Chinese partners later this year.
"China has an important role in the 7E7 program," said Morris. “Boeing is actively encouraging its global suppliers to place 7E7 and other aircraft work with Chinese factories. Our expectation is that over the life of the program, there will be several hundred million dollars of 7E7 parts produced in China.”
Boeing and its Chinese partners will continue to explore additional cooperation opportunities.
AVIC I Executive Vice President Yang Yuzhong said the firm's participation in the 7E7 project would showcase its design capabilities and high-quality products. He noted that the value of the contract will be very high, given the large size of the 7E7 market.
More than 3,400 Boeing airplanes--one-third of Boeing's global fleet--currently have their major parts and assemblies built in China. Most of the parts, worth more than US$500 million, are used in Boeing's popular 737 and 757 aircraft.
Boeing announced its first 7E7 order in April, a 50-plane contract from Japan's All-Nippon Airways. It said the contract was worth US$6 billion at list prices.
Air New Zealand placed an order last week for two 7E7s.
Morris said 50 airlines around the world are very interested in the 7E7, and Boeing hopes to receive over 200 orders by the end of this year.
Earlier reports indicated that China Eastern Airlines, the country's second largest carrier, is also considering buying the new plane.
(China Daily June 11, 2004)
