At a time when its biggest rival, Boeing, is embroiled in the U.S.-China trade war, Airbus is making a massive investment in the mainland: an initial investment of at least 6 billion yuan to build a 100-field airplane "life cycle" service center in Chengdu.
As the mainland aviation service industry continues to grow, the elimination of aircraft has also increased exponentially. Airbus's aircraft service center in Chengdu is expected to house 125 aircraft after completion, and the service center is expected to create a commercial aircraft service industry worth 21.07 billion yuan by 2030.
At a time when trade tensions between China and the United States are affecting Boeing's aircraft sales on the mainland, Airbus has begun to expand with great fanfare. The Toulouse-based commercial aircraft manufacturer hopes to gain a bigger market share in the fast-growing market.
Known as the "full life cycle" aircraft service center, it covers an area of about 690,000 square meters, about 100 football fields, enough to park 125 aircraft.
Airbus signed a memorandum of understanding with Chengdu City, Tarmac Aerosave and European Aviation Parts. In a statement, Airbus proposed that it will establish the first sustainable aircraft "full life cycle" service center project in China, which will provide one-stop service for all aircraft types from parking, storage to maintenance, upgrading, modification, disassembly and recycling.
The Airbus Introduction Service Center mainly provides 6 services: aircraft parking and storage, as well as maintenance work and airworthiness management during parking and storage; upgrade and modification work required for aircraft sublease or resumption of operations; aircraft fuselage maintenance;
Aircraft dismantling services, including parts removal and decomposition and green recycling of remaining airframe materials; passenger and cargo services, which are completed by outsourcing the passenger and cargo modification business to other maintenance enterprises in China with passenger and cargo modification capabilities, and this project does not involve the development of technical capabilities for passenger conversion and cargo; the purchase of second-hand aircraft and the management and trade of second-hand available aviation materials.
Klaus Roewe, Airbus' senior vice president for customer service, said aircraft phase-out in China was expected to "grow exponentially over the next 20 years." The service center is Airbus' first service center outside of China and Europe, and will also see Airbus leading the Chinese aircraft secondary service market in the future.
Airbus said the sprawling facility will be able to accommodate 125 aircraft. In 2021, Airbus mentioned in its forecast for commercial aircraft demand from 2021 to 2040 that China will need 8220 aircraft in the next 20 years.
"Chengdu Daily" reported that the total investment of the service center project is not less than 6 billion yuan, and it is expected to be put into use in the third quarter of 2023. Relevant planning shows that by 2030, the service center will have a total of 685 aircraft, 98 dismantled aircraft, 21 passenger and cargo aircraft, and the industrial scale is expected to reach 21.07 billion yuan.
The project will focus on the resources of "retired aircraft" and build a "four centers and one platform in Chengdu, including a parking and maintenance center: mainly for leasing companies and airlines to carry out aircraft storage business, and provide fixed inspection during the storage period to ensure that the aircraft re-enter the service state after storage;
Upgrade and modification center: mainly carry out large parts replacement (engine, landing gear, etc.), aircraft system and cabin upgrades, etc.;
Aircraft dismantling center: mainly through the purchase of domestic decommissioned aircraft, using the world's leading ecological and environmental protection process for dismantling;
Passenger and cargo center: the project company as the general contractor, after obtaining business orders, outsourced to the domestic maintenance enterprises with passenger and cargo capabilities for specific implementation;
Aviation parts trading platform: mainly for global customers to sell reusable disassemble parts.
For its part, the mainland's industry in the field of maintenance and dismantling of aircraft is still very thin. Of these, 37 percent of decommissioned commercial aircraft must be exported to Europe or the United States for dismantling.
Chengdu has developed into an important aviation manufacturing center, an operating base for Chengdu Aircraft Industry Group, a subsidiary of China Aviation Industry Corporation, and they also manufacture parts for Boeing's aircraft.
In 2020, the revenue of Chengdu's aero engine industry reached 17 billion yuan, accounting for nearly 20% of the total revenue of China's aero engine industry. Chengdu will continue to develop its supply chain in engine manufacturing and maintenance, and will become an international base for engine research and development in the future.
Continental has been investing heavily in developing its own commercial aviation industry, including the development of the first narrow-body airliner, the C919, to compete with Boeing's 737 and Airbus' A320. However, due to various reasons, the C919 manufactured by COMAC has encountered a series of delays in certification.
COMAC failed to achieve its goal of obtaining C919 certification by the end of 2021. Last week, the civil aviation administration of China, the mainland aviation regulator, confirmed that the C919 would try to get certified this year.
In terms of localizing some of its business in China, Airbus has been ahead of rival Boeing. In 2018, Boeing and COMAC formed a joint venture to establish the first Boeing delivery center in Zhoushan, Zhejiang Province, but Airbus operated a final assembly plant in Tianjin as early as 2008.
Boeing's sales were affected by the U.S.-China trade war that began in July 2018. U.S. President Joe Biden's administration has been reviewing progress on a phase one trade deal that includes a mainland pledge to buy Boeing commercial aircraft.
Importantly, since 2019, the Boeing 737 MAX has been grounded in China after two fatal crashes in Ethiopia and Indonesia. However, the Civil Aviation Administration of China said in December that it expected Chinese airlines to resume commercial operations of boeing 737 MAX aircraft early this year after regulators approved amendments to Boeing's flight control system for the Boeing 737 MAX aircraft.