China set to host Airbus assembly plant

China set to host Airbus assembly plant

On 13 June 2016, Airbus Helicopters and a China-based consortium announced the sealing of an important agreement. An agreement to establish a helicopter assembly line at Qingdao City in China. The deal is part of a plan in which Airbus has offered to sell the Chinese consortium 100 units of the light H135 helicopters. The total cost of which is EUR 700 million ($788) million. The assembly plant is expected to have an annual production capacity of 36 helicopters once it commences operations in 2018.

A Rising Deal for Airbus

The value of the deal is expected to rise during implementation. This could see the overall cost of the assembly line construction investment hit or exceed the EUR 1 billion mark. A news article published on the Reuters website cited an Airbus Helicopters representative as having hinted:

“The value of the deal rises to 1 billion euros when support and initial industrial investment are included.”

This was a tremendous development in the Chinese airline industry. Especially when you consider that Airbus Helicopters is the most dominant player in the commercial helicopter manufacturing industry.

This agreement brought to fruition a deal that was floated during German Chancellor Angela Merkel’s china visit in October 2015. It also signalled the strengthening of economic cooperation between China and Germany. Particularly as the two countries have agreed to set up the helicopter assembly plant at the Sino-German Ecopark in Qingdao. A move which seemed symbolic at the time.

A Country’s Commitment

Airbus Helicopters’ successful entry into the Chinese helicopter market emphasised the country’s commitment to liberalise its low-level airspace to the civilian aviation market. This also sets the stage for local players in the country’s private aviation industry to exploit untapped opportunities. Particularly in related aircraft services such as air ambulances. According to Reuters, the consortium of Chinese companies collaborating on this deal includes:

“China Aviation Supplies Holding Company (CAS), Qingdao United General Aviation Industrial Development Company (Qingdao United) and CITIC Offshore Helicopter Co Ltd.”

The market potential for the H135 helicopters in the specialised services industry is not in doubt. Especially since they are already in use in specialised services in the medical and security spheres. In fact, the Reuters article reports:

“Airbus Helicopter sees demand for 3,000-5,000 helicopters in China over the next 20 years.”