Sunday, November 2, 2008

Jetset: "Tianjin Takes Off"

Beijing’s long-overshadowed and oft-neglected sibling Tianjin is taking off thanks to Airbus (among others). The Toulouse-based aviation giant has just opened its first final assembly line outside Europe in the port city.

Greeted by boisterous lion dancers, I attended the opening ceremony wondering if the world is ready for made-in-China commercial jets. The factory is certainly impressive, covering an area of 600,000 square meters to accommodate not only an assembly line but also a spray painting workshop, a power station and a hangar.

The manufacturing process is equally fascinating. Six jigs loaded with parts for an Airbus A320 – including a pair of wings and the forward and rear fuselage section – were transported on a container ship from Hamburg to Tianjin. Now the workers are putting all the pieces of this huge puzzle together, aiming to roll the first plane off the line mid-2009 for an on-time delivery to Sichuan Airlines. By 2011, Airbus expects the annual capacity in Tianjin to reach 44. The plant will churn out 247 A320-series jets per year by 2016, and will also start selling them outside China.

For those of you concerned about safety, Airbus has emphasized that European engineers will be permanently on site, and that planes made in Tianjin will go through the same rigorous testing and certification processes. While many multinational companies take advantage of China’s cheap labor, Airbus has made the move more for its long-term goals than short-term gains.

Despite winning over nemesis Boeing in the worldwide market several years in a row, Airbus is still the underdog in China. Boeing entered China 13 years ahead of Airbus and still controls nearly two-thirds of the market. Although it has been gaining on Boeing since 2004, Airbus wants half of the market in five years.

One thing the two archrivals see eye to eye on is China’s huge appetite for new commercial jets in the coming years. By some estimates, China will spend some 300 billion US dollars by 2025 to triple the size of its fleet to nearly 4,000 aircraft. The bottom line: China remains one of the few bright spots in the gloomy global airline sector, which has been hit hard by volatile oil prices and slumping major economies.

By building a plant in Tianjin to assemble the popular A320, the workhorse of many airlines and the second best-selling jetliner family of all time (after Boeing’s venerable B737), Airbus has agreed to transfer some of its technology to China. Some analysts call it a decision that will bring guaranteed orders from Beijing, but others question the wisdom of helping a future competitor.

China has made no secret of its ambition in the aviation industry, introducing its first indigenous regional jet last year and launching its large commercial jet program in May. One of Airbus’ main partners in Tianjin, China Aviation Industry Corporation I (AVIC I), happens to be in charge of developing the country’s own big planes. When China unveils its own jumbo jet in the future, more than a few eyes will be scrutinizing the design for resemblance to Airbus models. Steven Jiang

This article was originally published on page 32 of the November 2008 issue of The Beijinger magazine.