Beijing aviation dream in doubt after first-half losses at AVIC Aircraft
Slow product deliveries push Avic Aircraft into the red in the first half
Steep losses at mainland jet manufacturer Avic Aircraft may be a signal that Beijing's ambitions to develop home-grown planes to compete with global giants may not be possible for several years to come.
Avic Aircraft, part of Aviation Industry Corp of China, reported yesterday net loss after extraordinary items of 136.8 billion yuan (HK$172.4 billion) for the first half, compared with a profit of 57.2 billion yuan in the same period last year.
The Xian-based company is the manufacturer of Modern Ark regional jets and a supplier for Commercial Aircraft Corp of China's bigger C919, the mainland's answer to Boeing 737 and Airbus A320, whose completion is two years behind schedule and counting. It also makes military planes and aluminium products.
Avic Aircraft blamed the poor results on the delivery schedule of its products. The company delivered only one Modern Ark jet in the first half. The target for the year is 10.
Revenue dropped 10.73 per cent to 7.04 billion yuan.
Analysts are not optimistic that the mainland's home-grown aircraft will be a hit.
"I don't think China's home-grown aircraft would be able to compete against Boeing or Airbus anytime soon. Their technology is several years behind their Western rivals'. By the time they come out, their planes are outdated anyway," one analyst said.
