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ATR and Embraer look to benefit from new China start-up rule
October 28th 2016
Regional aircraft manufacturers ATR, Bombardier and Embraer look to benefit from a new Chinese rule governing the size and number of aircraft new air operator certificate (AOC) holders are allowed to operate. Read More »
During the G20 meeting in September, government and Civil Aviation Administration of China (CAAC) officials agreed that going forward regional start-ups would need to commence operations with aircraft seating fewer than 100 passengers, effectively excluding Airbus and Boeing, but also Bombardier’s CSeries and Embraer’s E195 variants, from new entrants’ fleeting options.
As such, talking to ATW, Embraer CEO, John Slattery, said: “The restrictions prevent us from selling new Embraer E195s and restrict Bombardier from selling the CSeries [to Chinese startups], but our E190 is absolutely in the sweet spot of the policy. We’ve got very good penetration of the Chinese market with the E-190—it’s a recognized asset with very good support—so we’re hopeful that China will deliver a significant amount of activity for new and pre-owned aircraft.”
The Embraer boss added that there are currently around a dozen Chinese airline business plans that might result in an AOC application. “I’d be hopeful that we can capture at least half of those as Embraer customers,” he said. “We do think there will be a particular surge of activity in the Chinese market in the coming months.”
In this context, the Brazilian OEM will soon bring another variant to the market that fits China’s latest bill. Embraer is currently in the final stages of initiating the fourth and final E190-E2 test aircraft, basically a revamped version of the E190 with improved engines.
The E190-E2 had its maiden flight on May 23, months ahead of schedule, and was joined by a second prototype on July 8. The third aircraft took to the skies at the end of August, and the program remains on track to enter commercial service in the first half of 2018.
Embraer has accumulated 270 firm orders for the E2 and is aiming to exceed 300 this year.
China’s latest policy might also at last provide a breakthrough for ATR in the Mainland. The Toulouse-based OEM last year opened a representative office in Beijing, its first in China, but it has not sold any of its ATR 42/72 turboprops to a local customer. Speaking to Orient Aviation earlier this month, ATR said a first order announcement could be due “very soon”, possibly as early as the Zhuhai Airshow next week.
Meanwhile, Canada’s financially-troubled Bombardier last Friday confirmed it would axe approximately 7,500 staff through to 2018 to create “a clear path to profitable earnings growth”. It hopes the cuts will result in $300 million in annual savings. The Montreal-headquartered OEM says the layoffs will be “partially offset by strategic hiring” for the CSeries and Global 7000 business jet programs.
