Tuesday, March 20, 2007

China Threatens to Start Manufacturing Big Jets

The Financial Times had some dramatic news for the aircraft industry over the weekend.

China announced it will set up a state-owned company to build large commercial jet aircraft. The state council, roughly the cabinet, had made what it called an “important strategic decision” to begin research and development to enter the market dominated by Boeing and Airbus.

China is one of the biggest markets with an estimated demand for almost $350 billion in planes over the next two decades. Serving a big domestic market is a key success factor in industries with large scale production.

China's entry into this market over the next fifteen years could have significant impact on Boeing and its suppliers like Spirit Aerospace.

No comments: