European planemaker Airbus took a major step towards starting production in China when a kit of parts to be assembled in the northern port city of Tianjin left a factory in Hamburg by river on Tuesday. It is the first time Airbus has embarked on final assembly of its planes outside Europe and comes amid 10,000 job cuts at home as it cuts costs to survive a slide in the dollar.
McDonnell Douglas, which merged with Boeing in 1997, experimented with assembling MD-80/MD-90 passenger jets in China some two decades ago but the initiative was scrapped after less than 40 jets were assembled in favour of deals to supply parts.
Airbus, the jetliner subsidiary of European aerospace group EADS, is anxious to expand outside its domestic base to escape high costs imposed by a strong euro and to close a gap in the past in selling planes to China compared with Boeing. It agreed in 2006 to build an assembly plant south-east of Beijing to try to win a greater slice of fast-growing plane demand from the world's fourth-largest economy.
The kit containing the fuselage, wings, cockpit and other segments of a 150-seat A320 jet was loaded onto a barge for a short trip down the River Elbeto Hamburg's container port. The cargo will be transferred to a Chinese container ship for the one-month trip to Tianjin. "It is a complete aircraft now on its way to China. The whole cargo weighs 93 tonnes," spokesman Tore Prang said.
Airbus, created from a union of French, German, Spanish and British planemaking assets in the 1970s, has always moved aircraft segments between plants in Europe as part of an industrial jigsaw designed to preserve national workshare. But the Chinese plant represents its first effort to move to assembly outside Europe.
Plans to build civil Airbus freighter planes in Alabama are in doubt after US auditors questioned a separate contract to supply tanker planes to the US Air Force, on which the Alabama production line for A330 cargo planes depends.
The A320 family of single aisle planes comprises the A318, A319, the A320 and A321. It is the workhorse of the world's short-to-medium range airliner fleet alongside Boeing's 737.
Despite jitters also spreading through the global airline industry, triggering deferrals of orders from some US airlines, Airbus expects overall Chinese demand for commercial aircraft to grow fivefold in 20 years in a market worth some $200 billion.
It expects growing passenger traffic to spur overall Chinese demand for 2,670 new passenger planes in the next 20 years. Most of the planes built in Tianjin will be for Chinese domestic use. The Tianjin plant will deliver its first aircraft in 2009 and production there will reach four a month by 2011, easing overstretched assembly lines at Hamburg and Toulouse in France.
Airbus plans to increase total single-aisle production from 34 aircraft a month now to 36 by the end of this year, 38 in the third quarter of next year and 40 by the first quarter of 2010. These targets include Chinese output.
Only Airbus and Boeing supply jetliners in the 100-seat-plus range but China plans to encroach on the lower end of the market with its own 90-seat regional jet and could eventually vie for a slice of the large aircraft market, industry analysts say.