Honeywell sees China bucking Asian aerospace trend

Honeywell International Inc, the worlds largest maker of cockpit electronics, expects no growth in 2009 in its $900 million a year Asia-Pacific aerospace business, a senior executive said on Friday. By contrast, China, which accounts for a third of the divisions sales, was resisting the global slump in air traffic quite well, Mark Howes, regional president of Honeywell Aerospace, told Reuters.
Flying hours in China had been "a little bit more robust" in the first quarter than in other major Asian markets, and Honeywell was budgeting for a modest increase in revenues in China this year. "We have a small amount of growth forecasted in China, and in the region we have a flat-level forecast. Profitability we dont see as changing very much in terms of how were forecasting it," Howes, who is based in Shanghai, said in an interview.
Aerospace accounted for about 35 percent of Honeywells 2008 revenues of $36.6 billion. The diversified US manufacturer, which makes about half its sales in its home market, also produces building control systems and specialty materials. Howes said a slump in air traffic was hitting post-sales business in his division, which had also scaled back some manufacturing in Asia. But few jobs had been lost, and Howes expressed confidence in the medium-term outlook. "We believe there will be pretty dramatic growth over the years in the region, and in China in particular," he said.
Honeywell is working closely with an array of Chinese industrial partners to provide gear for a clutch of aircraft that China is developing, including the C919 narrow-body 190-seater aircraft and the ARJ21 regional jet. Howes called the domestic aerospace industry very vibrant and said state-owned Aviation Industry Corp of China, the countrys largest aircraft maker, was even actively preparing for a major expansion of helicopter and private jet traffic.
These markets are now stunted in China by the Peoples Liberation Armys tight control of the countrys airspace. Howes estimated that there are no more than 50 or 60 private jets in the whole of China.
But he said dialogue was taking place with the PLA with a view to freeing up airspace in parts of Guangdong province for air traffic management trials, perhaps as early as next year. "Theres a clear commitment here and an expectation that therell be substantial growth in helicopter and business jet and general aviation traffic," Howes said.