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China enters regional jet market

Established regional jet makers such as Embraer of Brazil may face a new competitor in China's ARJ21 project
Established regional jet makers such as Embraer of Brazil may face a new competitor in China's ARJ21 project

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HONG KONG, China (CNN) -- China has entered the billion-dollar race to develop and market a regional passenger jet for short-haul routes in Asia.

The China Aviation Industry Corporation I (AVIC I), one of the country's two big makers, said it plans to build a 72- to 79-seat jet by 2006 at a plant in Xian, capital of Shaanxi province in northwest China.

It said the aircraft will be known as the ARJ21, or Asian regional jet for the 21st century.

The decision to commit 5 billion yuan (about $600 million) to the project follows reports in late September that Japan's Mitsubishi Heavy Industries is planning to develop a 30-passenger jet for the U.S. and Japanese markets at a cost of about $400 million. (Full story)

The ARJ21 will target those short to medium-range routes in China where the average load is less than 100 passengers, while the smaller Japanese jet aims to compete on short-hop commuter routes in Japan and North America.

U.S. giant Boeing and Europe's Airbus dominate the international market for large (100-seat plus) passenger jets, but there is seen to be more scope for newcomers in the 50- to 100-seater regional jet sector.

Leaders are Canada, Brazil

The leaders in this field now are Canada's Bombardier and Brazil's Empresa Brasileira de Aeronautica (Embraer), both of which are marketing their aircraft in China.

If the plans by AVIC I and Mitsubishi Heavy come to fruition, they will provide the first Asian competition in what is regarded as a potentially lucrative sector.

Research by the Japan Aircraft Development Corp for the Japanese maker suggests a global market of 2000 propeller aircraft that could be replaced by small jets of up to 60-seat capacity.

The aviation industries of China, South Korea, Indonesia and Japan each looked at the regional jet sector in the late 1990s, but the 1997 Asian economic crisis and the tourism downturn after the September 2001 terrorist attacks meant there has been little progress with their plans.

In Japan, Mitsubishi Heavy aims to have its 30-seat prototype ready by 2007, according to the Nihon Keizai business daily.

First since 1960s

It would be Japan's first passenger jet and the first passenger aircraft developed since the 64-seat propeller-driven YS-11 was introduced in the early 1960s.

Mitsubishi Heavy cooperated with five other Japanese manufacturers to build the YS-11. During the late 1990s, it was also involved in the YS-X project, which explored the possibility of Japan building a 100-seat regional jet.

Japan also has plans to develop a 150-passenger jet, but the Mitsubishi Heavy small jet is likely to be built first.

According to the Nikkei, Mitsubishi Heavy may use engines developed by U.S. maker Pratt & Whitney.

China's AVIC I is said to be talking to another U.S. maker, GE Aircraft Engines, about buying its well-established CF34 engine for the ARJ21. This is the engine already used in the Bombardier and Embraer regional jets.

AVIC I and the other main Chinese aircraft maker, AVIC II, were formed in 1999 from a restructuring of the old China Aviation Industry.



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