Boeing deal marks 1st for Chinese firms
By Xie Ye (China Daily)
Updated: 2004-06-11 08:58

Leading global aircraft maker Boeing yesterday signed a landmark deal which will see two of China's largest aviation firms supply parts for its aircraft, including the proposed next-generation 7E7 Dreamliner jet.

The deal is a breakthrough for China's aviation sector, marking the first time the nation's suppliers have taken part in the 7E7 programme.

Boeing also said yesterday that it hopes to receive orders from Chinese airlines for its 7E7 aircraft - a medium-sized, fuel efficient airplane - this year.

"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," added Morris.

Boeing has pinned its hopes on using the 7E7 jetliner to beat off competition from European 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 yesterday's memorandum of understanding, Chengdu Aircraft Industrial (Group) Co Ltd, an affiliated company of China Aviation Industry Corporation I (AVIC I), will supply the 7E7's rudder, a key component providing stability for an aircraft's direction control.

Hafei Aviation Industry Co, 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 programme, said Morris.

He also said that Boeing is expected to finalize contracts with Chinese partners later this year.

"China has an important role in the 7E7 programme," 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 programme, there will be several hundred million dollars of 7E7 parts produced in China," said Morris.

Boeing and its Chinese partners will continue to explore additional co-operation opportunities, said Morris.

AVIC I Executive Vice-President Yang Yuzhong said the firm's participation in the 7E7 project will showcase its design capabilities and high-quality products.

Yang said the value of the company's work 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 aircrafts.

Boeing announced its first 7E7 order in April, a 50-plane contract from Japan's All-Nippon Airways, a contract it said was worth US$6 billion at list prices.

Air New Zealand Ltd placed an order last week for two 7E7s.

Morris said 50 airlines around the world are very interested in the 7E7, and it hopes to receive over 200 orders by the end of this year.

Earlier reports said China Eastern Airlines Co Ltd, the country's second-largest carrier, is also considering buying the new plane.