China to build passenger jets

From the WSJ:

China has confirmed plans to set up a company to make large passenger airplanes, taking another small step toward a grand goal but with a long haul yet ahead.



The new company will aim to design, produce and sell jetliners big enough to carry more than 150 passengers. If successful, it could eventually pose a threat -- at least in mainland China -- to Boeing Co. and Airbus, which now dominate the Chinese and global markets for passenger aircraft.



Although China had earlier flagged its intentions to produce big planes, the creation of a company specifically for this task would be new. The venture's shareholders are to include China's two biggest plane manufacturers and the Shanghai city government, Xinhua said, in comments it attributed to Jin Xingming, the director of Shanghai's aviation administration. Xinhua reported in January that the planned company would be capitalized at five billion yuan ($700 million).




AVIC I is making some progress toward this goal, with a 90-seat regional jet called the ARJ21 that it rolled out in December. AVIC I plans to produce 30 of the jets each year by 2011. It also produces aircraft components for both Boeing and Airbus. Starting in August, AVIC I plans to begin assembling entire single-aisle Airbus A320 jets at a plant under construction in the northern city of Tianjin.



Air travel within China is booming. Chinese airlines operated 1,150 commercial aircraft last year, and Boeing forecasts they will need 3,310 additional jetliners by 2026 to satisfy the surging demand.