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Thursday, July 31, 2014

Cessna talking with Chinese company about developing business jet

BY MOLLY McMILLIN
The Wichita Eagle

Cessna Aircraft is in talks with Aviation Industry Corp. of China about collaborating on a business jet.

AVIC issued a request for information and Cessna responded, said spokesman Bob Stangarone.

“At this point discussions are exploratory,” he said Thursday.

Cessna vice president for international sales Trevor Esling told the South China Morning Post recently that the preliminary talks were around jointly designing and producing the jets.

AVIC is in discussions with many of the business jet manufacturers.

That includes Hawker Beechcraft. The company has also responded to AVIC’s request for information, officials say.

Hawker Beechcraft CEO Bill Boisture said recently that he has been in discussions about the potential of a venture for final assembly of one of its airplanes for the emerging Chinese market.

Preliminary decisions could be made on a partnership before the end of the year, Boisture said last month.

Cessna and Hawker officials say they see the vast potential of the Chinese market.

“A significant market for business jets in China is expected to emerge once the challenges of the infrastructure are met,” Stangarone said.

China’s aviation industry has been hampered by airspace limitations and the lack of airports and fixed base operators.

However, China has relaxed restrictions on low-altitude airspace and plans to open more than 50 airports by 2020.

The market in China today is for more longer-range jets. Government restrictions still limit the use of private planes.

Gulfstream has the most jets based in mainland China at 31.

Cessna has 27 Citations in operation in mainland China, followed by Bombardier Aerospace and Hawker Beechcraft each with 12 and Dassault with five. Cessna also has 165 single-engine aircraft and 13 Caravan turboprops in operation in China.

Cessna’s light sport aircraft, the two-seat Skycatcher, is built in China by Shenyang Aviation Industry Corp. And Cessna has recently added a sales representative in the region.

China has also been snapping up U.S. aviation companies.

Last month, China Aviation Industry General Aircraft Co. closed a deal to acquire aircraft manufacturer Cirrus Aviation, based in Duluth, Minn. In April 2010, CAIGA bought Epic Air, a small, cash-strapped general aviation company, for $4.3 million. In December, an AVIC subsidiary said it would buy aircraft piston engine manufacturer Teledyne Continental Motors for $186 million.

“What we’re seeing is a two-pronged strategy,” aviation consultant Brian Foley of Brian Foley Associates wrote in March. “First, the Chinese government is developing civil aviation as a national priority. Second, these are deals that make good economic and business sense.”

Reach Molly McMillin at 316-269-6708 or mmcmillin@wichitaeagle.com.

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