Airbus encourages investment in China as U.S tariffs bite on Mainland

November 1st 2018

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As the trade war between the U.S. and China intensifies, Airbus is increasing its investment in the world’s biggest aviation market. Read More » In Beijing last month, the European manufacturer’s chief procurement officer, Klaus Richter, said it hoped to cooperate with more Chinese suppliers, including private companies.

Speaking on the eve of the delivery of an A320 to China Express Air that was assembled at Airbus’ Tianjin Final Assembly Line, Richter said the seats for the aircraft were produced by Hubei province-based Jiatai Aircraft Equipment Co Ltd. It was the first time an A320 aircraft had been fitted with Mainland manufactured seats.

“We hope to cooperate with more Chinese suppliers in producing structural parts, such as lavatories, ceilings and seats,” said Richter. “This will save a significant amount of transportation cost and raise efficiency. We also are persuading our European and U.S. suppliers to set up plants in China and make investments in the country.”

Total output from industrial cooperation between Airbus and Chinese companies has increased from US$120 million in 2008 to $741 million last year. It is expected to reach $1 billion by 2020.

For its single-aisle family aircraft, Airbus spends between $15 billion to $20 billion a year on the procurement of parts from more than 250 suppliers, including several Chinese manufacturers. Globally, Airbus cooperates with more than 1,500 suppliers.

In China, the Aviation Industry Corporation of China (AVIC) recently won qualification to produce galleys for A320s delivered from Tianjin. Airbus has said it would like to develop a cabin supply chain with AVIC.

Airbus Commercial Aircraft China chief operating officer, Francois Mery, said the company wanted to establish a vertical integration supply chain in China, which would allow Airbus to purchase raw materials and assemble parts and aircraft in China.

With 20% of all single-aisle aircraft being delivered to Chinese customers, Airbus and Boeing are focusing on their operations in China. there. Boeing will soon unveil its first overseas completion and delivery center for the B737 at Zhoushan, Zhejiang province and will deliver the first single-aisle B737 MAX plane directly from Zhoushan to a domestic airline later this year.