The trouble with China

By Victoria May 23, 2013 11:35

The trouble with China

As we move into the final weeks before Paris and wonder where on earth our car passes have got to, how long the traffic jams will be and just how wet we are going to get this time, it is worth taking note of the big story of the show – It is of course the task of filling A380 and 747-8 delivery slots. John Leahy at Airbus needs to fill A380 delivery slots for 2015 so parts can be ordered this year without worry of a whitetail and of course for Boeing they already have a 747-8 whitetail and could do without any more. See more on that in the bumper Airline Economics Issue 14 at the show.

But Paris 2013 is no time to be having a go at Boeing and Airbus – It is however time to start asking serious questions of Chinese regulators, COMAC and AVIC:

Senior aviation figures are coming forward to Airline Economics stating that there is distressing news coming out of China on the C919 program. Sources state that there will now not be a Chinese engine on the C919 in the timeline stated as they simply will not have their act together in time to assemble a LeapX engine or to stick another Chinese engine on the same. The Chinese side involved at AVIC have proven themselves to date to be more than difficult to deal with and many at Safran have been left banging their heads against the wall.
An important element of this is Chinese requirement for Chinese pre-registration of anything that is built in China. Up until now Western aviation companies have produced goods in China on the basis that the Chinese facilities are off shoots of the main factory and they are operating under the company’s global quality standards procedures. The Safran quality system and anything that comes out of that factory is approved by EASA with a European production sticker. Now the Chinese are saying that they want the Chinese Production Sticker, which means that the Chinese factory has to respond to Chinese laws of production – that have not been defined yet – and need to be approved in accordance with a Chinese quality control systems – that do not even exist. So at this time if this goes ahead nothing will be able to come of out China until this system is completed and ratified by Beijing.
At the moment the Chinese are working well with the FAA to align standards but the EASA has had convoluted contact on agreeing standards because China has been stalling talks over the EU ETS issue. Something, which from the ICAO talks last week, looks like it is going to get worse before it gets better.
The fact is that a senior Chinese government official woke up one day and just decided that from now on everything has to have a Chinese stamp on without realising the consequences of that decision. Now they are realising that they have to put all the requirements in place fast and they have no idea of how to do it, thus ruining their own system and delaying everything. This will either set the whole Chinese Aviation industry back a decade or someone will have to climb down and recognise defeat on the issue.
So it is time to ask: With labour rates rising fast and the new requirements hindering operations, were the big aviation manufacturers too quick to jump into China? And given that the C919 will not be ready on time as things stand, were Bombardier, Boeing and Airbus too quick to launch their latest narrow-body offerings in reply?
Given that all three offerings are based on new engines with little by way of design change I think the answer is yes. They were two years too soon and in the event the engines will require a string of updates and tech insertions. One senior figure in the industry points to the new GE engine for the 777X as an example – ceramics are being used throughout the engine and this technology should now be applied to the LeapX and GTF. So given that upgrades are the order of the day are we finding ourselves in the same situation as say the V2500 A1 Vs the V2500 A5 in the late 1980s/early 90s? Best make sure your Neo or Max engine is not an A1!
The full story will appear in the Paris Air Show issue of Airline Economics.
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By Victoria May 23, 2013 11:35
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