ARJ21 Xiang Feng [Flying Phoenix]
At the end of 2000, it appeared that China had abandoned the ambition to build a medium-capacity, single-aisle airliner. "We cannot compete with aviation giants such as Boeing and Airbus in financial clout and market share" (Zhang Hongbiao, Vice Minister of the Commission of Science, Technology & Industries of National Defence (COSTIND), quoted in China daily, 6 November 2000). China's 'best bet' would be producing regional airliners.
COSTIND would invest $600-$725 million in R&D for the new regional jet program aiming to build a new 50-70-seat turbofan aircraft to international standards. AVIC 1 established AVIC 1 Commercial Aircraft Company (ACAC) to oversee resources, production, certification and marketing of ARJ21, the new 79-99 seat regional jet. AVIC 1 hopes to sell 300 ARJ21s to the domestic market and export 200 in twenty years. GE has been chosen to supply the CF34-10A engine and the Honeywell and Parker Hannifin team is to develop, produce and support the ARJ21's flight control system. AVIC 1 has also been in discussions with Bombardier about a regional jet joint venture, but the future of this is uncertain.
AVIC 2 devised a separate three-step plan for developing regional aircraft: establishing a joint venture for final assembly, producing components locally and developing by-products and new products. AVIC 2's joint venture with Embraer to produce a 30-50-seat regional plane in Harbin had been approved.
The market prospect for regional jets in China is promising even after the events of 11 September 2001. Boeing has predicted that around 70 per cent of the total of the 1800 new medium and large-sized commercial aircraft purchased by China over the next twenty years would be single-aisle regional jets (Keck, 2001). The competition for selling regional jets to China is intense. Bombardier and Embraer are racing each other for selling into the Chinese airliners. Boeing and Airbus continue to actively market their smallest aircraft to Chinese airlines in an effort to capture the growing regional jet market. Price competition in all aircraft categories can be expected to intensify following the collapse in the world aircraft market after 11 September 2001. This is good news for Chinese airlines, but bad news for a potential regional jet produced in China. If China is, indeed, successful in designing and building its own regional jet, it will be far behind in the race for its own national market by the time that the first deliveries begin. This will be a huge disadvantage in an already intensely competitive segment of the world aircraft market.
