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People's Daily Online>>China Business

Chinese, Russian firms in plane production deal

(Xinhua)

16:08, February 16, 2012

BEIJING, Feb. 15 (Xinhua) -- A Chinese company has ventured into small aircraft manufacturing by clinching a cooperative deal with a Russian designer, eyeing China's vast-yet-fledgling general aviation market.

China Oriental Sciences Group, together with China-Russia International Investment Co. Ltd., entered an agreement with Russian aircraft designer KB-SAT on jointly building general aviation aircraft in China.

The three sides will invest 8 billion yuan (1.27 billion U.S. dollars) to set up a manufacturing and technical base in Ordos, a prefecture-level city in north China's Inner Mongolia autonomous region, according to the agreement signed in Beijing on Wednesday.

Construction of the plant will start this year and it will be able to assemble 400 4-12-seat general aviation aircraft by the year 2016, when the project reaches its full capacity, said Zhuang Zhong, president of Beijing-based China Oriental Sciences Group, which will have a controlling 52 percent stake in the project.

KB-SAT and China-Russia International Investment Co. Ltd. will have 38 percent and 10 percent stakes, respectively.

General aviation refers to all flights other than military and scheduled airline and regular flights, both private and commercial.

"China's general aviation industry is at its initial stage of development, and the market demand is huge," Zhuang said.

China has loosened its grip on general aviation in recent years. In March 2011, Civil Aviation Administration of China head Li Jiaxiang said low-altitude airspace would be fully open by 2015.

"The opening of low-altitude airspace will herald a rising demand in medium to small-size aircraft," Zhuang said, adding that he is confident over aircraft from the joint venture as Russia owns advanced aircraft technologies.

The project will be operational at the end of this year and the first aircraft is expected to come off assembly lines early next year, Zhuang said.

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