Airbus expands reach with China venture.

Author:Alpern, Peter
Position:News & analysis

Airbus stepped out of its European comfort zone recently when it opened a $600 million final assembly line for its top-selling A320 aircraft in China and committed to buy $1 billion of locally made components by 2020.

The plant, which the company says is the most modern of its kind in the world, seeks to lay Airbus' footprint in China's booming aviation market, which is growing at 14.5 percent a year.

"With the final assembly line here in Tianjin, we deepen and expand our industrial relationship, which is a key pillar of the internationalization strategy of Airbus," says Airbus head Thomas Enders.

Airbus executives predict more than 3,000 new orders for planes over the next 20 years as China develops the world's second-largest aviation market, behind that of the United States.

John Leahy, sales chief of Airbus, foresees China accounting for as much as a fifth of the more than 850 orders the European plane-maker expects this year.

Airbus already has 450 aircraft on order in China, and has a provisional agreement to supply a further 280--plus Leahy expects the Beijing authorities to approve another 160 by year's end. The new plant, he adds, could mean that Airbus would capture more orders than Boeing.

But Leahy notes that the world economy is changing quickly and with western airlines facing takeover or bankruptcy and struggling to...

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