Aims To Compete with Airbus, Boeing By 2020

Chinese officials in Shanghai announced Sunday the inauguration of a new passenger aircraft company focused on the development of a 150-seat airliner. The Commercial Aircraft Corporation of China Ltd. (CACC) aims to compete with the Boeing Co. and Airbus as the Chinese domestic and international travel market expands.

The company announced plans to build the airliner by 2020 in a drive to develop more sophisticated products, cutting its reliance on overseas companies.

Vice Premier Zhang Dejiang said at the inauguration ceremony that the large jet program was of significance to improve China's independent innovation capabilities and to meet the rapidly expanding civil aviation market at home.

The company was formed with an initial investment of 19 billion yuan ($2.7 Billion) according to Bloomberg. The biggest shareholder in the company is the State-owned Assets Supervision and Administration Commission, investing 6 billion yuan.

Other shareholders include China Aviation Industry Corporation I (AVIC I), the country's largest aircraft producer, and China Aviation Industry Corporation II (AVIC II).

As ANN reported in January, the announcement of the new company was expected after officials announced AVIC I and AVIC II, would be restructured to improve global competitiveness.

Zhang Qingwei, minister of the State Commission of Science, Technology and Industry for National Defense, was appointed the board chairman.

Jin Zhuanglong, the company's general manager, told Chinese News Agency Xinhua that "It is too early to set a timetable or make development strategy," adding that it will take a long time for the company to train talents and do research.

"Since large aircraft cannot be made in one or two days, CACC will pose no threat to large jet-makers like Boeing and Airbus," Jin said.

The industry still awaits the first flight of the first "homegrown" Chinese airliner, the ARJ-21, being built by AVIC I. The 90-seat airliner, dubbed the Xiangfeng, or "Flying Phoenix" was slated to take to the skies in March after rolling off the assembly line in December.

FMI: www.avic1.com.cn/English/EnglishIndex.asp