Saturday, July 19, 2008

China and Farnborough air show

So, the Farnborough air show took place this past week with a lot of fanfare. The Russians unveiled their "new su-35" fighter and MS-21 airliner. Bombardier signed the agreement with SAC to build the fuelsage for the C-Series. And as expected, the Chinese airlines bought a bunch of Boeing/Airbus planes and CFM/IAE engines. At the same time, the Chinese aircraft makers achieved nothing as we expected.

We've known for a while that China wants to learn from the West in aircraft design and manufacturing. It has done so in its cooperation with Boeing, Airbus, Bombardier and Embraer. The question is, do the Russians really have anything to offer to China? If you read the press release this week, the first thing that the Russians talked about were going through this project with China. You can see one of the reports for it here.
At the International Air Show in Farnborough outside London, which celebrates its 60th anniversary this year, Russian air companies are expected to sign a series of major deals with their counterparts.

The deals could cover both running projects, such as the Sukhoi SuperJet-100 civilian aircraft, and other upcoming projects. One of the latter is the MS-21 short- and medium-haul jetliner. Like the SuperJet, it is to be developed cooperatively with outside firms. In this case Chinese aircraft makers could become Russia's leading partners.

Alexei Fyodorov, head of Russia's United Aircraft Building Corporation, was somewhat cautious in announcing this news at Farnborough. Russia, he said, was not against a joint venture with China in the development of the "most ambitious Russian project."

This is not the first time the two countries have attempted to join forces in building an aircraft. In 2006, Russia proposed to China they both design and build a long-haul jetliner under a priority national project included in China's 2006-2010 five-year plan. As a starting point, Russia suggested the Russian-made Il-96-300. The results of this joint venture could compete with America's Boeing and Europe's Airbus.

Russia was clear about its motives. Its air carriers today need between 200 and 300 passenger liners of this class. Unfortunately, many of them cannot afford new models and opt for cheaper used foreign makes. This is why Russia needs overseas partners: to share the risk. The Chinese, however, declined the offer, and Russia had to cancel the program.

China's decision is understandable. They need aircraft designed for medium distances, and this is what they will build. One of them - the ARJ-21, seating 78-90 passengers - is expected to go into production in 2009. It was developed with the American firms and Ukraine's Antonov design bureau. Russia was left out in the cold.

Last year, China decided to build a medium-haul 150-passenger airliner, and in May of this year the Chinese Commercial Aircraft Company was set up in Shanghai.

But Russian producers have not abandoned hope. Sukhoi's General Director Mikhail Pogosyan visited Beijing late in May and said his company would cooperate with China in designing civilian aircraft. Now, at Farnborough, he is echoed by Irkut leaders, the corporation planning to build MS-21s.

Unlike Russia, China has never built its own passenger planes. The 1980 project to develop the 178-seat Y-10, a rival of the Boeing-707, ended in failure as did a later attempt to launch mass production of an airliner similar in design to a McDonnel Douglas model. It may be that the Chinese will now look more favorably at Russian proposals.

Russia needs cooperation. When Russian aircraft builders plan production quantities, they must know if their product will be in demand not so much in Russia as outside it. Industry and Trade Minister Viktor Khristenko said the domestic market in Russia is not large enough to make aircraft production commercially viable. In fact, Sukhoi Holding intends to sell 500 of the planned 800 SuperJet-100 models abroad before 2024. To make its position sure, it sold a blocking stake in its civilian segment to Italy's Alenia Aeronautica.

The importance of two large players appearing on the Russian aircraft market is hard to overestimate. They would be capable of eliminating the present shortage of short- and medium-haul airliners. In the next few years, the Sukhoi SuperJet-100 could replace the veteran Yak-42, as well as the Tu-134, which, in many cases, is being written off as scrap. The MS-21, once it enters the market in 2015, will not only replace the Tu-154 and Tu-204, but also the A320, which will have reached the end of its service life by that time. What's more, Irkut promises the MS-21 will be 15% lighter than its European cousin and consume 25% less fuel, a factor to bear in mind as jet fuel prices continue to soar.

Analysts say Russian air carriers will require 800 to 1,000 aircraft of various classes in the next decade. Russian aircraft builders will, unfortunately, be unable to prevail across the board. But medium-haul liners offer a glimmer of hope. Fyodorov says that the MS-21 and the SuperJet-100 can meet over 80% of domestic airline requirements for aircraft in this size range.

Next year, at another show in Le Bourget, France, Irkut is planning to announce the results of international tenders for the production of MS-21 components. It will perhaps be known by then if the Chinese will participate in the project or opt for building their own airliner.

It's understandable why Russia would want to involve China in MS-21 (or RRJ originally). China represents such a large market that it would allow any project to be successful. Despite having possibly the least capable of the 3 designs (ARJ-21, RRJ and MRJ), China's ARJ-21 looks like the most likely to succeed. With 171 orders from domestic carriers already + 7 firm and 20 optional for export, ARJ-21 is far leading the rest of the field. Despite Sukhoi blowing a lot of hot air claiming markets all over the world (including China), it has only received 12 oversea orders so far on top of over 100 Russian orders. The number of Russian airlines with needs for regional aircraft really shocked me as I am composing this blog. In the case of China, I don't think it can actually take any more orders (not enough production capability), but I don't think the same problem exists with Sukhoi. And even in the cases when Chinese airlines are not ordering ARJ-21, they are still ordering from Embraer instead of Sukhoi. At this point, I think MRJ is doomed to failure regardless of the number of technological advancements its claiming.

Back to MS-21, Russians are claiming 25% fuel efficiency over A320. Considering that Airbus and Boeing's next generation airliner are not coming out until 2020, logic would dictate that MS-21 would be the most efficient airliner in this class for 5 years. However, whether the Russians can really develop something that's as fuel efficient and environmentally friendly as the Western firms is questionable. At the end, they are not likely to want to share too much of their design "secrets" with China. This is not to say that the Russians are stingy in this aspect. They have shared far more of their aerospace technology with China than any of the Western companies. Based on the deal they struck with India for the 5th generation aircraft, I would think that Sukhoi would want to keep much of their core technology. China would get to do some outsourcing work and probably an assembly line. But, do they really want to continue to get the same deal that they already get from Airbus? Would the Russians really treat them as an equal partner in such a project? All the bargaining power rests with China in this case. Their market power attracts cooperations from all the major aircraft makers. They have made developing "large airplane" a national pride kind of project (along the line of project 921). If the Russians can't offer something that's better than the west, they would have no chance with China.

As for su-35, it was unveiled with much publicity this week. I guess the Russians have realized by this point that China is not interested in this aircraft due to their faith in the J-11 series. It's interesting that they are offering it to India. I wonder why would India even buy this aircraft with MKI project already so far along? And without these two large buyers, who else would be able to afford su-35 in large numbers? It will be interesting to follow the status of this project.

9 comments:

Jiang said...

Feng, I think we should not coorprated with russian at ALL!!!! First, they stinks they can not even fullfill their promise with IL-76 even though we sighned the contract, now they want higher price, welll. We will give them their higher price for ONE LAST TIME, and there should not be anymore major deal, what if they rip us off again. I think dealing with Airbus or Boeing or anywestern companies are FAR BETTER than russians.

First, western large aircraft are FAR SUPERIOR than russian's. Second, western contractors are much more fatithful and will fullfil their contract. Third, our Large Aircraft project is our most important project for Aerspace industry, we have to get the best Deal.

And as for the SU-35BM, let the indians have them, so the indians can go singing and dancing that they got another SHOOPAR POWAR WEAPON from russia. We do not need that planes!!!

timurelame said...

The only way for the Large Transport Plane project co-development to proceed with Russia is the complete transfer of design and manufacturing technologies from Russia. Otherwise what's the point? Nowhere else in the world is there as large a developing civilian aviation market as the Chinese one.

If the Russians want to play cards they'll have to ante up some solid chips this time. Maybe it's better
to cooperate with Antonov instead?

The MRJ does look like an excellent concept. Too bad the Japanese just does not have a big enough domestic market for it.

DM said...

any news on the status of chinese engines progress.

Feng said...

for the airliner, expect them to use GE/RR/PW engines. But for military transport, they should be using something domestic along the lines of D-30KP3 or PS-90A. Again, the point here is that the Russians would have to offer much more ToT than any Western companies. Let's face it, the Western aircraft makers produce airliners that can actually pass FAA and produce reliable servicing.

Jiang said...

Feng, I think the Su-35BM is DOOMED, the only one wants them is russia itself. Maybe, Iran and some other countries will buy few, but I doubt the oder will go over 80. So it is DOOMED!!!!

I think this is a punishment for russians, they have NEVER treated us fairly.

Jiang said...

Feng, I was reading an artical about Taiwan's F-16 block-20. I just wondering how advanced these planes are, how do they compare to F-16 block52+???

BTW, which is better our J-11, J-11A or F-16 block20. I heard you saying that F-16 block20 is better in BVR than our J-11 but what about J-10A/B?? I doubt it is better than J-10A.

Jiang said...

Feng, here is an interesting artical I really want you to spend some time reading.

http://www.nti.org/e_research/e3_53a.html

Tell, me how do you think??

lol, it even mention that China is interestes in a spanish 20000 ton tiny carrier. Can you believe that????

Feng said...

They were interested in an European carrier design a while back, but that didn't work out. As for Taiwanese F-16s, it's been said that they are built to block 50 standard. But that's only in terms of the avionics and such. Not all of them have the AMRAAM upgrade and the airframe itself is still an F-16A/B airframe. So, you can think of it as an F-16 MLU. It should be slightly better than the Russian flankers that China has. Remember, most of the Russian flankers have received the R-77/N-001VE upgrade.

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