China launches passenger aircraft manufacturing company - to take on Airbus, Boeing

Shanghai: China has launched a new commercial plane manufacturing company, which it hopes will go a long way in meeting domestic demand, which is slated to grow exponentially over the coming years and decades. Officially inaugurated in Shanghai on Sunday, the company, named Commercial Aircraft Corporation of China Ltd. (CACC), will be responsible for researching, developing, manufacturing and marketing a homegrown large passenger aircraft.

CACC will aim to develop regional aircraft able to carry more than 150 passengers, Xinhua said.

The company has a registered capital base of 19 billion yuan ($2.7 billion). The State-owned Assets Supervision and Administration Commission has invested 6 billion yuan, making it the biggest shareholder, with roughly 30 per cent. Other shareholders of the company also include China Aviation Industry Corporation I (AVIC I), the country's largest aircraft producer, and China Aviation Industry Corporation II (AVIC II) which together will hold 25 per cent.

Other investors include state-owned mineral firms such as Chalco, Baoshan and Sinochem.

AVIC is developing the 90-seat ARJ21 jet which is due to begin testing later this year, with its first deliveries expected in 2009.

With demand in mainland China slated to grow five-times over the next 20  years, to 2,650 aircraft, the central government expects to reduce its reliance on the duopoly exercised by Airbus and Boeing in the manufacture and supply of passenger aircraft.