Chinese buying spree creates some frustration | The Wichita Eagle

In the past year, China has been "snapping up" U.S. general aviation companies, including a recent deal to buy cash-strapped Cirrus Aircraft, an aviation consultant noted in a recent report.

While the purchase of Cirrus is a small transaction, it underscores China's plans to expand its aviation industry.

"In buying up established companies, China gets the management know-how, brand, distribution, technology in days, not decades," said Brian Foley, with Brian Foley Associates.

After Foley wrote a report on the issue two weeks ago, he received an "outpouring" of calls from the aviation community frustrated that Chinese companies are buying U.S.-based ones, he said.

The speed and passion of the feedback was a surprise, he said.

"It occurred to me that it may not be too late to try to get another offer in on Cirrus," Foley said.

The deal between a division of China Aviation Industry General Aircraft, or CAIGA, a Chinese state-owned company, and Cirrus isn't slated to close until July.

In the meantime, Foley plans to contact a pool of U.S. investors to see whether there's enough interest to put together a counter offer to buy Cirrus.

Foley is a licensed securities representative with John W. Loofbourrow Associates , a New York investment firm.

In April, CAIGA purchased Epic Air for $4.3 million. The small general aviation aircraft company, based in Bend, Ore., had filed for bankruptcy.

In December, a subsidiary of CAIGA said it would buy aviation engine maker Teledyne Continental Motors for $186 million in cash.

Last month, CAIGA announced it would buy Cirrus for an undisclosed sum. The company, based in Duluth, Minn., is now owned by Middle East investors.

It delivered 264 Cirrus SR20, SR22 and SR22T single-engine aircraft last year. The planes are made using carbon-fiber composites. It also has a small jet in development.

China is also trying to buy Dubai-based Emivest Aerospace, once Sino Swearingen, which built a small business jet called the SJ30.

The buying spree is a two-prong strategy on China's part, Foley said.

First, developing civil aviation is a Chinese national priority.

China has begun relaxing airspace restrictions for low-altitude airspace, and planemakers consider China an emerging market for sales.

"They have an exploding need for aviation," said Rolland Vincent, an aviation consultant based in Plano, Texas. "It makes sense for them to service their own market."

Second, the deals also make economic sense.

China has an abundance of cash, and general aviation is at the bottom of the market cycle, Foley said.

So far, none of the acquisitions have been sizable, he noted. But the composite technology used in some general aviation aircraft is important, Vincent said.

"It's definitely the way of the future," Vincent said. "We're not going to be bending metal forever."

But Vincent said there's not a lot of concern about the transfer of technology in these recent deals. And the production and materials technology is 15 or 20 years old.

"It's very good technology but it's not like we're the only ones that know how to do this stuff,'' he said.

Still, if he were an aircraft manufacturer, he would be concerned, Vincent said. They are already dealing with new competition from Brazil-based Embraer and upcoming competition from Honda Jet.

"We're witnessing the birth of a new competitor," Vincent said.

China's attempt at becoming an aviation manufacturing powerhouse is a long process, Vincent said. It make take 10 or 20 years.

"It's just a question of when," he said. "If they don't buy Cirrus, they'll buy something else."