Home' Asian Aviation : AAV February 2016 Contents 18 AsianAviation | FEBRUARY 2016
The government of China is finalising plans to
combine at least 40 different companies that
develop plane engines on the mainland in a
deal that would create a giant company with
about $22 billion in assets.
As Asian Aviation went to press, news
reports said the plan was part of China’s
desire to move up the value chain in highly
technical and sophisticated manufacturing
as part of its drive to continue developing its
The Chinese government and companies
including Aviation Industry Corp. of China,
known as AVIC, were said to be investing an
additional 35 billion yuan (US$5 billion).
China has for years been moving away
from being the “factory to the world” by
making clothes and Christmas decorations
and wants to develop a highly technical
manufacturing industry. A 2015 “Made in
China 2025” policy document released
by the Communist Party made clear the
country wants to transform its industrial
base to include everything from robotics to
The country hopes to compete at some
point with manufacturers in Japan and
Germany and eventually hopes to take on
industry giants Airbus and Boeing.
Shanghai-based Commercial Aircraft
Corp. of China, known as Comac, is
developing the C919 single-aisle jet, which
is expected to make its first test flight this
year and CFM International, a joint venture
between GE Aviation and a division of
France’s Safran, will supply a version of its
LEAP engine for the initial C919s.
The new company will contain almost all
assets related to aerospace engines in China,
sources told various news outlets.
The plan to merge engine assets is also part
of the government’s efforts to trim bloated
state-owned companies and turn them into
Bloomberg reported that China also plans
to combine some assets of its three biggest
China’s efforts to produce its own
passenger aircraft date back to the 1970s
and its development of the Y-10 based on the
Boeing 707 and later picked up speed when
it acquired a number of 707s along with
spare Pratt & Whitney engines.
Those efforts died off in the 1980s when
China opened more to the West and its
leaders directed the aerospace industry to
pump Western developers for knowledge
with joint ventures.
Both sides though, realised that joint
ventures would also be difficult because
Boeing and Airbus were not keen on helping
China develop competition to their industry-
standard planes. — Matt Driskill
The International Air Transport Association
(IATA) said global air freight cargo volumes
measured in freight tonne kilometers (FTKs)
expanded 2.2% in 2015 compared to
2014. This was a slower pace of growth
than the 5.0% growth recorded in 2014.
The weakness reflects sluggish trade growth
in Europe and Asia-Pacific.
After a strong start, air freight volumes
began a decline that continued through most
of 2015, until some improvements to world
trade drove a modest pick-up late in the year.
Cargo in Asia-Pacific, accounting for
around 39% of freight traffic, expanded by
a moderate 2.3%. The key markets of Europe
and North America, which between them
comprise around 43% of total cargo traffic,
were basically flat in 2015. Latin America
suffered a steep decline (-6.0%) while the
Middle East grew strongly, up 11.3%. Africa
also saw modest growth of 1.2%. The freight
load factor (FLF) was at times the lowest for
some years, falling to an average 44.1%
compared to 45.7% in 2014, driven down
by weak demand and capacity expansion.
“(The year) 2015 was another very
difficult year for air cargo,” IATA’s director
general, Tony Tyler, said. “Growth has
slowed and revenue is falling. In 2011 air
cargo revenue peaked at US$67 billion.
In 2016 we are not expecting revenue to
exceed US$51 billion. Efficiency gains are
critical as the sector adjusts to shortening
global supply chains and ever more
competitive market conditions.”
Tyler said the industry must adjust to the
“new normal” of cargo growing in line with
general rates of economic expansion.
“The industry is moving forward with an
e-freight transformation that will modernize
processes and improve the value proposition.
The faster the industry can make that happen,
the better,” Tyler said. — Matt Driskill
Giant merger for Chinese engine developers on track
Global air freight growth slows in 2015 – IATA
DEC 2015 VS. DEC 2014
YTD 2015 VS. YTD 2014
“The industry is moving
forward with an e-freight
transformation that will
modernize processes and
improve the value proposition.
The faster the industry can
make that happen, the better.”
Tony Tyler, director general
8/02/2016 11:52:26 AM
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