Even as China restricts the development of new carriers, Boeing forecasts it will need 3,400 new aircraft, valued at $340 billion in the next 20 years, including just 330 regional jets, hard to believe given Mesa’s investment in the market and its projections for its partnership with Shenzhen Airlines – KunPeng Airlines.
Meanwhile, Bombardier forecast that China would take 15 percent of forecast deliveries over the next 20 years or 1,660 of the 11,200 aircraft to be needed in the 20- to 149-seat market. The world demand for 100- to 149-seat aircraft – Bombardier’s proposed C Series – is forecast at 5,900, according to the Canadian company. Related Story
Mesa is on track to have 20 aircraft in place by the 2008 Olympics and CEO Jonathan Ornstein noted that with its partner, Shenzhen Airlines, the program could represent a demand for 100 aircraft.
“It is interesting to note that in a country of 1.4 billion people, only 70 regional jets are currently in operation, less than that at United’s hub operation in Chicago,” he said. KunPeng is scheduled to launch this month. KunPeng could be the last new entrant airline in China for awhile given the Chinese action to halt further growth of the airline market. Related Story
China Aviation Industry Corporation I (AVIC I) is building the ARJ21 in partnership with 19 foreign parts suppliers and it will be the first Chinese designed passenger aircraft although the engines are from General Electric and avionics are also Western. The 90-seat jet’s range is 1,380 miles with an extended range version ups to 3,700 kilometers planned for the future. First delivery of 10 ARJ21s goes to Shandong Airlines in 2009, although it has orders from Shanghai Airlines and Shenzhen Financial Leasing as well as orders or expressions of interest totaling 60 aircraft, the International Herald Tribune (IHT) reported. Indeed, Ornstein expressed interest in the aircraft during conversations with Wall Street analysts, saying it would go KunPeng.
Prospects for foreign aircraft were dulled in 2001, according IHT, reporting on an Asian air show. It cited the 18 percent increase in duty on foreign aircraft less than 25 tons imposed in 2001 which basically halted further sales to the country. The move was a measure to help its developing aircraft industry – particularly the ARJ21, scheduled for its maiden flight next March.
It was after the duty increase that Embraer forged a deal establishing a joint venture with the company to assemble the ERJ-145 in country. In addition, Bombardier will invest directly in China, teaming with China Aviation Industry with an investment of $100 million in the ARJ 21 project. The Bombardier partnership will produce a larger aircraft than the 90-seat version. In return for a royalty, Bombardier will be responsible for foreign certification. Finally, ATR inked a deal during Paris to increase the participation of the Chinese manufacturer in its ATR-42. Related Story
Both China and Russia, with its Sukhoi Superjet, know that the key to commercial success is Western certification. Related Story
Such deals are not new in China, said IHT. Boeing’s 707 was copied in the 1970s as the Changhai Y-10 which only made it to flight tests owing to a lack of funding. McDonnell-Douglas, now part of Boeing, did a similar joint venture as Embraer with a co-production agreement on dozens of MD-80s/90s. Before the aircraft were built, however, a technology-sharing dispute ended the deal, said the paper.
“Air travel in China is centered very heavily on a few hubs,” said IHT. “The 20 largest airports are estimated to fill 80 percent of passenger volumes. A large number of smaller airports serve fewer than 200 people a day. Smaller aircraft on point-to-point routes would take the pressure off overcrowded hubs and improve flight frequency and the efficiency of aircraft use.”
The updated Boeing forecast says China will have the fastest-growing market, making it the largest market outside of the U.S. for new commercial airplanes. It will lead all domestic air travel markets with a long-term, passenger-kilometer growth rate of 8.8 percent. Following the anticipated surge in passenger traffic for the 2008 Beijing Olympic Games, the China domestic market will grow nearly five-fold by 2026 to become slightly larger than today's intra-North American market. China's fleet will nearly quadruple to 4,460 airplanes by the end of the forecast period – 2026.
Single-aisle airplanes such as the Boeing 737 will be the largest category with total new airplane deliveries reaching 2,200. Intermediate twin-aisles such as the Boeing 787 Dreamliner and 777 will see approximately 750 airplane deliveries. When combined, the single-aisle and intermediate twin-aisle market will make up 90 percent of China's total delivery dollars. About 90 airplanes of 747-and-larger size will be delivered.

BAe Systems Sets Sights on Burgeoning Asian Freight Market
With China's cargo markets leading the global industry, Chinese air carriers will add about 300 freighter airplanes by 2026, said Boeing. The total fleet of freighter airplanes will more than quadruple in size and, even here, regional freighters are expected to take a large role, according to Steve Doughty, Vice President Sales and Marketing for BAE Systems Regional Aircraft.
Despite having five of the world’s top 10 cargo airports measured by annual tonnage, and a further seven airports in the top 25, many with double digit growth, the Asian airfreight market is still developing, said Doughty, indicating there is a huge void in regional freighter feed, during a recent speech at Air Freight Asia Conference in Hong Kong.
“The European fleet is larger overall and includes some 450 regional freighters, while the Asian fleet, although smaller, has a larger long-haul freighter component.” he said. “The regional freighter fleet in Asia numbers only around 80 aircraft.”
Doughty noted major integrators are now developing feeder networks, especially in China, predicting, as Asian economies flourish and consumer demand grows, pressure for domestic air freight feeder networks will increase.
He predicted as pressures for domestic air freight networks grow, regulatory barriers will be changed to focus on passenger fleets. He noted that since regional routes in the area are longer than in Europe, the demand will gravitate towards regional jet freighters, rather than turboprops.
Doughty noted major integrators are now developing feeder networks, especially in China, predicting, as Asian economies flourish and consumer demand grows, pressure for domestic air freight feeder networks will increase.
Doughty noted the lack of regional/short-haul freighters, saying it was a function of freighter economics, regulatory issues such as aging aircraft as well as hub congestion, adding these factors may further constrain the development of feeder networks. He also said its newly re-launched BAe 146QT freighter is perfectly positioned to meet market demand.
Asia still relies on road transport and passenger-belly capacity to move products, unlike more developed regions where feeder networks have already evolved taking advantage of a more diversified production capacity in contrast to the centralized industrial production and export in Asia.

146 Freighter Program on Track
Doughty’s remarks came as conversion of the first re-launched BAe 146QT (Quiet Trader) freighter remains on schedule and the first converted aircraft – a Series 200 – is expected to be completed in early-to-mid 2008. Program launch was at the end of January with Aerostar of Bacau, Romania was confirmed as the conversion center for the program in March. BAE Regional Aircraft Systems has already launched its intensive marketing for the 10- to 12-ton BAe 146QT now filling the void between the five-ton Boeing 737 Classic conversions and the eight-ton turboprops.
BAe has completed the training with classroom and on-the-job training undertaken by BAE Systems instructors. In addition, aircraft ground support equipment and aircraft manuals had to be positioned at Bacau. Work also awaited the recently granted EASA Part 135 approval. In the meantime, Aerostar engineers have completed the development of a production process.
A similar process has been underway at Aerostar’s subcontractor, Avioane Craiova, the company responsible for the manufacture of the Large Freight Door and the door surrounds as well as the 9G bulkhead, the floor strengthening, the E-Class interior and associated hardware. Two large freight door jigs are now in position in Craiova and test programs have been successfully carried out for the machine manufacture of large items such as door hinges. The processes passed as acceptable first time and production manufacture of these items has now begun. Three sets of kits of parts are now being built at the same time with delivery of the full manufactured kits from Craiova to Aerostar scheduled for next February.”