The purpose and motive of this development report is to review, identify, discover and understand the model of an advanced internet-enable maintenance system for commercial aircraft services. The improvement and development will try to identify all the factors that may be instrumental to the maintenance, repair and overhauling of the aircraft system towards achieving a well managed and functioning aircraft for commercial purpose. A mix of primary and secondary improvement and development will be used in order to give weight and identify importance of individual factors that are discovered in the literature. In specific, the development will review this model of advanced Internet-enabled maintenance, repair and overhaul (e-MRO) system for commercial aircraft services.
BACKGROUND
Maintenance, repair and overhaul (MRO) is an area which offers opportunities for creating new e-MRO business models by optimising processes through e-enablement, particularly in sectors requiring global presence and execution. Requirements for certification involve the verification of manufacturing, supply and operational information, including generating detailed technical records both at the aircraft operational level as well as component level.
The requirements of this project involve developing systems aimed at optimising the management of commercial aircraft MRO (maintenance, repair and overhaul) operations. This work supports the development of web-based Aircraft Maintenance Programs aimed at facilitating and managing associated tasks on a global basis. Such systems would enable dynamic interfacing of task requirements, resources allocation as well as managing and scheduling of associated work-groups. Task Optimisation, Risk Reduction, Reporting Metrics development and Supplier integration technologies sit at the heart of this project. The sub-system development involves the following systems:
SAFA Audit Reporting System Per EASA requirements. This is a programme that interfaces with the Q/A department and Airworthiness Authorities, in identifying, recording, controlling and auctioning airworthiness "findings" whilst aircraft are operational.
Engine Flight Monitoring Programme: This system is a CAA requirement, to monitor and maintain Engine performance data on a continuous basis, for "health monitoring" purposes and proactive maintenance initiatives.
Component Defect and change Database: This requirement addresses the need to maintain records of all critical components and defects raised and entered in the aircraft operational Flight Logs by the Crew.
AUFS.
-Development of an advanced Internet enabled aircraft utilisation and forecasting system (AUFS) for the management of commercial aircraft MRO (maintenance, repair and overhaul) operations. This project involves the development of an application utilising mathematical algorithms and modelling techniques to drive forecasting requirements for tasks and resources needed for aircraft maintenance checks and inspections. The task of optimising forecasting shall take into consideration the operators current and future utilisation, operating and maintenance schedules as well as resource constraints
IFPM.
-Development of integrated flight parameter monitoring (IFPM) system for the management of commercial aircraft MRO (maintenance, repair and overhaul) operations. This system allows for on-line management of flight parameters, such as flight hours, flight cycles and calendar limitations. The system is designed to monitor the airframe, its engines (including controlled internal parts) and components by tracking the following individual as well combined factors in an actual operational environment: flight hours, landing, and take-off cycles. The development shall maintain critical safety requirements and involve a web-based interface leading to the optimisation of the overall planning and control task.
ATS.
-The requirements of this project revolve around developing an advanced task scheduling (ATS) and workgroup management (WM) system for the management of commercial aircraft MRO (maintenance, repair and overhaul) operations. Task scheduling and automation involves the sequencing and arranging of work orders and activities and allocating task responsibilities. Resources and associated factors/constraints are considered and include job duration, required skills, job priority and sequence, parts availability, special tooling and status of equipment. Such systems would facilitate the decision making process by taking all the above factors into account during the process as well as facilitate integration with parts suppliers.
- This is a rare opportunity to participate in a real-time project requirement, leading to the development of a system, which will require global certification and approval, i.e. UK CAA (Civil Aviation Authority) standards, as well as European JAA (Joint Aviation Authorities) and US FAA (Federal Aviation Administration).
-Experience with computing and specifically the use of Internet Tools & Technologies such as ASP .NET, PHP, MySQL are a pre-requisite for this Project.
Scope
The scope of this particular development has multiple levels. On one tier, it tries to recognize and analyze the literature, scanning the studies that have been done so far in the understanding of advanced internet-enable maintenance system for commercial aircraft services. It is for the purpose of understanding the various factors that have been seen as being important by scholars over the past few decades. Furthermore, it also reviews the various methods in which studies have been carried out by bench marking and using SWOT analysis. By reviewing these methodologies, the study is able to come up with its own choice of method that may to compare the system. The implementation and development aims at being useful for the understanding of the general framework of advanced internet-enable maintenance system for commercial aircraft services as well as testing the maintenance, repair and overhaul operations through a survey. Eventually, the study may be able to reach a series of recommendations and conclusions that can be of used for the management and administration of these aircraft for commercial purpose.
Aims
The aim of the development is to improve and develop an advanced internet-enable maintenance system for commercial aircraft services and implement this development on the basis of the maintenance, repair and overhaul operations of the aircraft operations. The knowledge that is acquired from this development can then be of use to managers and administration of advanced internet-enable maintenance system for commercial aircraft services.
Objectives
1) A comprehensive understanding of the framework of advanced internet-enable maintenance system for commercial aircraft services in terms of theory that can be found in the literature. This will involve the basic understanding of the maintenance, repair and overhaul operations of the aircraft operations.
2) The development of a set of technical features that can be incorporated into a system.
3) Carry out a primary research in terms of literature that may enable a discovery of those factors that are instrumental in maintenance, repair and overhaul operations of the aircraft operations
4) start with a pilot study on a smaller size so that the response may be assessed for effectiveness.
5) Carry out the close study of the maintenance, repair and overhaul operations of the aircraft operations.
6) Analyze the results through statistical tools and means.
7) Make recommendations to management on advanced internet-enable maintenance system for commercial aircraft services based upon the analysis.
RATIONALE FOR THE STUDY
The study is beneficial to the airline; it will provide relevant data on the maintenance repair and overhaul operations of the aircraft operations. The study is beneficial to the government; it will provide relevant data on the formulation of policy needed to guide the maintenance, repair and overhaul operations of the aircraft operations in the country. The study is beneficial to the management of airlines as it will provide relevant data on the effect of maintenance, repair and overhaul operations on the aircraft operations and the necessity or otherwise of such investment. The study is beneficial to researchers, as it will provide new knowledge on recent development in the field of advanced internet-enable maintenance system for commercial aircraft services.
"[Enigma's Airline MRO Solution] is the only commercial off-the-shelf solution that can properly deliver all of the complex content that our mechanics demand. The key is Enigma's ability to manage the volume and diversity of information required to keep our fleet running smoothly and make it fast and easy for those making repairs to get the specific data they need, at the moment they need it." (R. Pannekoek, 2008)
Enigma offers five different solutions for aviation maintenance:
In Service Job Card Generator
Automates the creation of configuration-based (serial number/ tail number-effectively) job cards required for performing heavy, shop and line maintenance.
In Service MRO
Geared towards airlines and MRO shops, it delivers key technical information for performing heavy, line, and shop maintenance for commercial aircraft and engines.
IBM Technical Document Management and Delivery (TDMD)
Provides immediate visibility into the latest maintenance change notices and helps automate document management and workflow.
Oracle Complex MRO
Provides maintenance planners and technicians complete, accurate and timely information at every phase of the MRO process.
Enigma 3C for Aircraft Maintenance (see description below.)
Enigma 3C for Aviation Maintenance
Aircraft operators and third party service providers utilize the Enigma airline MRO software solution, based on the Enigma 3C Platform, to provide its mechanics, in a single application, all of the OEM-supplied technical support information needed for MRO operations. This includes maintenance manuals, standard practices manuals, component maintenance manuals, service bulletins, engineering orders and illustrated parts catalogs.
This "aircraft encyclopedia," with dynamic, integrated parts and service information, and links to inventory, order management and other systems, reduces the time aircraft maintenance technicians (AMTs) spend finding critical support information needed to perform maintenance leading to increased maintenance productivity and service capacity.
The Enigma 3C for Airline MRO software solution provides AMTs, in a single application, all of the technical support information needed for efficient, effective service and maintenance.
This electronic "aircraft encyclopedia" includes maintenance manuals, standard practices manuals, component maintenance manuals, service bulletins, technicians' best practices, Customer Originated Changes (COCs), temporary revisions (TRs), engineering orders, illustrated parts catalogs and other types of information that can influence maintenance, service and parts decisions.
An AMT uses a single sign-on to access the system, enters a tail number and a fault code and is instantly presented only with accurate and relevant information needed to perform maintenance.
Robust search and navigation tools smoothly guides the AMT through the - potentially gigabytes of - information and allows him to quickly find what's needed to complete his task.
Updates are made dynamically so the AMT is only working with the most current information available.
The solution also ties into back office systems such as MRO, ERP, EAM and ecommerce to provide the AMT with a comprehensive view of MRO operations. This is critically important for parts procurement. An AMT can directly link from the maintenance information to parts inventory and ordering systems to easily order or locate necessary parts.
Operators and service providers also integrate their own content into the OEM-supplied maintenance information including COCs, best practices and policies and procedures.
AMTs insert their own best practices directly into the information on a particular procedure or part, enhancing "expertise sharing" throughout the service and support team.
CHAPTER TWO
LITERATURE REVIEW
2.1 INTRODUCTION
Aero-engines are extremely reliable machines and operational failures are rare. However, great effort is currently being put in to reducing the number of in-flight engine shutdowns, aborted take-offs, and flight delays through the use of advanced engine health monitoring technology. The key benefits realised by these efforts are the reduction of delays and reductions in the cost of ownership of aircraft. This is reflected in a change in emphasis within aero-engine companies where, instead of selling the engines to customers, there is a fundamental shift to adoption of power-by-the-hour contracts. In these contracts airlines make regular fixed payments based on the hours flown by the engines, and the manufacturer retains the responsibility for maintenance of the engines. To support this new approach, improvements in in-flight monitoring of engines are being introduced, along with the collection of much more detailed data on the operation of the engine.
Each engine produces large amounts of detailed operating data (for example, a civil airliner produces approximately 1 Gbyte of data per engine per flight) which then has to be transmitted and analysed. Rolls-Royce currently has over 50,000 engines in service, with total operations of around 10M flying hours per month. In the future, one can envision many 100s of Gbytes of data being transmitted every day.
The reductions in delays and costs of ownership mentioned above can be achieved by providing an infrastructure capable of managing and analysing the large amounts of data produced by these fleets of engines. This infrastructure has to be capable of performing large compute-intensive optimisation, modelling and analysis to identify faults that have occurred, and, more importantly, to identify potential faults and provide knowledge-based maintenance advice to prevent failures and aircraft downtime.
It is clear that the software tools and expertise that comprise this "virtual work-bench" must be geographically distributed to cope with the demands of an international operation (see Figure 1). This work-bench must also be flexible so that the user can choose the appropriate tools to diagnose the potential problem, rather than being presented with a monolithic fixed system.
Figure 1 - Distribution of data in a virtual maintenance environment.
The tools comprising this virtual work-bench must be able to identify clusters of anomalies or novelties as they appear so as to give some insight into the underlying cause of a problem (for example, some operators may experience certain faults because of the way that the engines are being operated). The virtual work-bench must then allow the user to test ideas regarding engine diagnoses in a virtual environment using engine performance models. This latter stage is particularly useful when a diagnosis is unknown.
If an abnormality is identified which has not been encountered before (novelty analysis), then the work-bench provides the ability to consult previous engine histories to see if there are other engines that have shown similar abnormalities. The history of an engine with a similar abnormality may provide some knowledge as to the nature of the problem and its solution.
The work-bench also provides the ability to perform large-scale optimisation of both single-objective and multi-objective problems. This allows the user to perform robust optimisation on problems as diverse as engine controller design and the design of optimal maintenance strategies for fleets of aircraft. Using these tools, the user can investigate the impacts of changing operational schedules on cost and aircraft down-time.
The virtual work-bench described above lends itself to implementation using the paradigm of Grid Computing. Grid computing has the potential to mediate the task of diagnosis and prognosis within complex and dynamic operational business and engineering processes. The Grid is capable of providing high performance computing resources on demand, offering a resource for the computationally-intensive tasks of modelling, optimisation and analysis within the decision support process.
The tools comprising this virtual work-bench must be able to identify clusters of anomalies or novelties as they appear so as to give some insight into the underlying cause of a problem (for example, some operators may experience certain faults because of the way that the engines are being operated). The virtual work-bench must then allow the user to test ideas regarding engine diagnoses in a virtual environment using engine performance models. This latter stage is particularly useful when a diagnosis is unknown.
If an abnormality is identified which has not been encountered before (novelty analysis), then the work-bench provides the ability to consult previous engine histories to see if there are other engines that have shown similar abnormalities. The history of an engine with a similar abnormality may provide some knowledge as to the nature of the problem and its solution.
The work-bench also provides the ability to perform large-scale optimisation of both single-objective and multi-objective problems. This allows the user to perform robust optimisation on problems as diverse as engine controller design and the design of optimal maintenance strategies for fleets of aircraft. Using these tools, the user can investigate the impacts of changing operational schedules on cost and aircraft down-time.
The virtual work-bench described above lends itself to implementation using the paradigm of Grid Computing. Grid computing has the potential to mediate the task of diagnosis and prognosis within complex and dynamic operational business and engineering processes. The Grid is capable of providing high performance computing resources on demand, offering a resource for the computationally-intensive tasks of modelling, optimisation and analysis within the decision support process.
Distributed Aircraft Maintenance Environment (DAME)
The Distributed Aircraft Maintenance Environment (DAME) project is a pilot project supported under the United Kingdom e-Science research programme in Grid technologies [2]. Industrial partners in the DAME project are Rolls-Royce plc, who have provided the aero engine data for the diagnostic system (see Figure 2), Data Systems & Solutions, who deliver commercial aero engine health monitoring services, and Cybula Ltd, who provide the high-speed pattern matching technology developed at York University. The university partners collaborating in the project are Sheffield, York, Leeds and Oxford.
DAME is particularly focussed on the notion of proof of concept, using the Globus tool kits and other emerging Grid service technologies to develop a demonstration system. This is known as the DAME Diagnostic/Prognostic Workbench. The demonstrator system tackles complex issues such as security and management of distributed and non-homogenous data repositories within a diagnostic analysis framework with distributed users and computing resources.
Figure 2 - Representative sample of data downloadable from the engine on-wing monitoring system.
The Rolls-Royce supported University Technology Centre (UTC) in the Department of Automatic Control and Systems Engineering at the University of Sheffield is currently engaged within the D DAME project contributing expertise in Modelling, Optimisation and Decision Support. Grid computing expertise gained on the DAME project is also influencing other work within the Sheffield UTC enabling existing in-house tools, models and services to be placed within a potentially new Grid-enabled framework.
2.2 China's aviation market
After more than ten years of double-digit annual growth, China has emerged as the world's second-largest aviation market.
Driven by rapid economic growth and increased demand for air travel, China hopes to build 42 more airports by 2010. If it does, China will have 186 airports, including 3 national hubs, 7 regional hubs, 24 medium hubs, 28 medium-sized airports and 124 small-sized airports. The number of airports serviced by scheduled airlines will approach 260 by 2015. The commercial air fleet will grow along with the number of airports, up from from the current 960 aircraft to an estimated 1,600 by 2010 and to 3,300 by 2020.
The rapid increase in the number of airports and aircraft will require new infrastructure, aircraft engines and parts, pilots, controllors, and communication/navigation/surveillance syetems and equipment. Commercial opptunities for US exporters will be significant.
The following report will discuss seven different market segments: airline operations and aircraft, engines and parts, Maintenance/Repair/Overhaul (MRO), airport construction, Air Traffic Control (ATC), General Aviation (GA), and personnel training.
Market Demand and data
Airline operations and aircraft
According to the Civil Aviation Administration of China (CAAC) data, from January to November 2006, the airline industry handled a total air traffic flow of 27.56 billion ton-km, 147 million passengers, and 3.09 million tons of cargo and mail. In each of these corresponding areas, there was an increase of 15.4%, 15.3%, and 11.4% from the previous year.
The state-owned airlines of China National Air Holding Group, China Eastern Air Holding Group, and China Southern Air Holding Group dominate the trunk domestic air routes, international routes and hub airports. Local airlines, such as Hainan Airlines, Shanghai Airlines, and Xinhua Airlines, serve the rest of the market and focus on regional hub flights. Local airlines operating in China are actively seeking to increase their market share. An example is Hainan Airlines which recently announced an agreement with Embraer for the purchase of 100 regional jets worth $349 million.
In recent years, smaller, low-cost airline companies have emerged. Currently, there are nine private airlines (see the list in the Engines and Parts Prospective Buyers) with approval to operate, and more approvals are likely in the near future.
Some foreign airlines are seeking cooperation with China's airlines; for example, Mesa Air Group and Shenzhen Airlines jointly established a regional airline on December 22, 2006, and Air France/ KLM is negotiating with China Southern to create a air cargo joint-venture.
Boeing is the largest supplier of aircraft in China, with a 60% market share. Airbus is the second largest with about 30% of the market share. Based on China's GDP development rate, the demand for commercial aircraft is expected to reach 2900 units within the next 20 years, with an estimated market value of $ 28 billion. 70% of the new aircraft will be narrow-body,
regional jets to increase flights between the smaller, domestic airports and larger hubs.
Engines and parts
The follow table illustrates China's imports from the United States for aircraft and parts in the past several years:
HS
Description
2001
2002
2003
2004
2005
2006
United States
26204.28751
27227.90044
33882.96219
44652.66092
48734.97589
59222.47244
88
Aircraft,Spacecraft
1986.468689
2331.660323
2313.894851
2520.893593
3401.67475
5634.593646
8802
Powrd Aircrft;Spcraft
1626.455168
1928.826572
1876.410862
2109.346111
2864.490751
4790.855341
8803
Parts
359.031825
388.20905
433.038172
410.898847
536.374246
842.73415
8805
Other 88
0.75319
14.399444
4.374889
0.477692
0.784707
0.883926
8801
Balln,Dirigbl;Glidr,E
0.012037
0.01366
0
0.009461
0
0
1.Source of data: China Customs. 2.In Millions of US Dollars
The main users of aircraft engines and parts are the airlines, MRO corporations, foreign joint ventures of aircraft manufacturers, and domestic aircraft manufacturers (see the prospective buyers and suppliers section). AVIC I (China Aviation Aviation Corperation I) and AVIC II (China Aviation Aviation Corperation II) are China's largest aircraft manufacturers.
The main suppliers of engines and parts are listed under the Key Suppliers section.
The Chinese government is in the process of manufacturing its first regional jet. The ARJ 21 is manufactured by AVIC I Commercial Aviation Co. Ltd. (ACAC). ACAC is a limited-liability company, which is jointly-owned by AVIC I and fifteen other enterprises. The ARJ-21 will be tested in 2008 and fully operational by 2009. Over half of the airplane's parts come from the United States such as the avionics system, which is supplied by Rockwell Collins.
Following is the statistic data on engine market share:
General Electric (GE) 6%
Rolls-Royce (RR) 9 %
*Intenational Aero Engines (IAE) 12%
Pratt and Whitney ( PW) 13%
*CFM 60%
Source: GE Market Report
* IAE is a joint venture of Pratt and Whitey, Rolls-Royce, MTU, and IHI.
* CFM is a joint venture of General Electric and SNECMA with 50% and 50% shares.
MRO (Maintenance/Repair/Overhaul)
The top three aircraft maintenance and engineering corporations are the Aircraft Maintenance and Engineering Corporation (AMECO), the Guangzhou Aircraft Maintenance Engineering Company Limited (GAMECO) and Taikoo (Xiamen) Aircraft Engineering Co.Ltd (TEACO).
AMECO Beijing, located at Beijing Capital International Airport, is a joint-venture between Air China Limited and Lufthansa which was established in 1989. The total registered capital is $187.53 million and a joint venture agreement was signed to last 40 years. Air China Limited holds 60% of the registered capital and Lufthansa holds the remainer.
GAMECO, also established in 1989, is a joint venture between China Southern Airlines Co. Ltd., South China International Aircraft Engineering Co. Ltd. and Hutchison Aircraft Maintenance Investment Ltd. (Hong Kong). The company specializes in aircraft and airborne component maintenance, repair and overhaul, providing domestic and international customers with services for Boeing B737/747/757/767/777, Airbus A300/319/320/321/330 and EMB 145 .
TAECO is a joint-venture formed in 1993 with investment of $262 million on its five hangars. The two largest shareholders are HEACO Hong Kong Aircraft Engineering Co. Ltd (with 56.55% of the shares) and Xiamen Aviation Industry Co. Ltd. (with a 10% stake); Boeing Company, JAL and Cathay Pacific each hold 9.09% of the shares. TAECO already has four fully functioning hangars and a fifth will be operation at the end of 2007. As a result, TAECO has the capacity to service six wide-body and three narrow-body aircraft simultaneously. In its short history, TAECO has already overhauled over 600 aircraft.
TAECO has started the construction of its 6th hangar which will make it one of the world's largest aircraft maintenance centers. The new hangar will cover 50,000 square meters and cost $67 million. Due to be in operation by the end of 2008, it will enable TAECO to accommodate 17 aircraft at one time.
Airport construction
The Chinese government will invest a large amount of funds to start construction on new airports and to expand existing airports. According to data released by CAAC, the budget for airport construction is $18.2 billion (RMB140 billion) to build 42 civil airports in the 11th five-year plan period (2006-2010). This will include a large new airport in Kuming with an estimated budget of $3 billion. The majority of the new airports will be able to accommodate a Boeing 737.
(Please see the main airport construction projects during the 11th five-year plan in appendix 1.)
Another highlighted airport construction project is a secondary airport in Beijing. Currently, the location is being discussed. Upon completion of the third terminal building project at the Beijing Capitol Airport in 2008, construction will begin on the secondary airport.
In regards to new airport construction, international companies will have opportunities to participate in both the airport design and in the infrastructure construction. Qualified companies may be approved to compete with domestic companies, via the bidding process, for design, consultation, surveillance, management, and construction of designated civil airport projects. So far, the Beijing Capital Airport, Shanghai Pudong Airport, Shanghai Hongqiao Airport, Shenzhen Huangtian Airport, and Guangzhou's new Baiyun Airport were all designed by international companies.
Ground service is another area in which foreign companies can actively participate. Beijing Capital Airport, Guangzhou Baiyun Airport, and Chengdu Shuangliu Airport have all established joint ventures with a foreign partners (Singapore, Indonesia and UK) in ground services. Shanghai Airport Ground co-operated with Cargo Warehouse and Lufthansa, with the China Air Oil Supply Corporation (CAOSC) have established many joint ventures with foreign companies to provide air oil supply services.
ATC
ATC has been a crucial barrier hindering the development of Chinese civil aviation. Airport capacities and air-route capacities are stretched in several high traffic areas. For example, CAAC has set the upper-limit for the Beijing Capital Airport at 1,000 flights per day; causing an increasing number of airlines to fight over time slots.
Insiders estimate that CAAC intends to spend RMB 9.0 billion ($18 billion) for ATC during the 11th five-year plan (2006-2010). The main projects include: three new Area Control Centers (ACC) in Xi'an , Chengdu, and Urumchi; reorganizing the current airspace structure and reducing the total number of area control centers from 27 to 6 by 2010; updating the existing three ACCs in Beijing, Guangzhou, and Shanghai; building an R&D and Maintenance Center in Tianjin; and building an Air Traffic Flow Management Center in Beijing. These improvements in the air traffic control system will require the purchase of CNS equipment, including the procurement of 20 ATC radars, 65 VHF remote sets and local communication systems, 20 VOR/DME, and 30 sets of ILS. Moreover, at least 20 ATC radars will need to updated as well.
6. General Aviation (GA)
General aviation is still under-developed due to controlled aerospace, multifarious procedures for GA aircraft registration, and the lack of GA airport and maintenance bases. Statistic shows the GA fleet in China is comprised of only about 600 aircraft. The main GA operation includes agriculture, forestry, fishery, medical, search & rescue, mining, sports, scientific experimentation, pilot training, and a small portion of business aviation. Most aircraft suppliers for these specific areas are domestic. The aircraft suppliers for some high-level users, like business aviation, pilot training, and flight inspection, are Beechcraft Hawker, Cessna, Gulf-stream, Bombardier and Le Groupe Dassault.
7. Personnel Training
Facing the rapid development of civil aviation, China is experiencing a dramatic shortage in pilots, mechanics, inspectors, air traffic controllers and maintenance engineers. For example, China imports about 140 aircraft per year. The international airline industry standard is one aircraft to twelve pilots, so China's annual need for pilots is approximately 1,700. However, Chinese domestic pilot training capacity is only for 1,000 pilots per year.
Another challenge facing airline industry growth in China is the shortage of air traffic controllers. Currently, China has 3,270 controllers. It is forecasted another 3,000 additional controllers will be needed by 2010.
Currently, seven domestic universities are authorized to train pilots, and three domestic universities are authorized for controller training. Also, China Southern Airlines has established a joint flight college in Australia and Airbus has also set up simulator training center in Beijing.
Best Prospects
Driven by rapid Chinese economic development, an ever greater flow of people will travel to and from China for business and for pleasure. Over the next twenty years, China predicts that its air transportation passenger volume will grow by 11% anually. China's civil aviation is in a rapid growth stage (see figure 1 for the latest development statistics); whereas, the U.S. civil aviation market is mature and growing slower.
To ensure sustainability and the health of the overall aviation sector, China must strengthen under-developed sectors of the airline industry. According to CAAC's 11th five-year plan, favorable policies will be drafted to stimulate regional and general aviation, focusing primarily on regional development in the near term and general aviation in the coming years.
Furthermore, CAAC plans to lift its control over domestic air route operation by 2010, Presently, domestic airlines must apply for approval to fly specific routes. In the future, the airlines would only need to report their flight plans to CAAC. This liberalization of domestic flights would enable small, privately-owned and joint-venture airlines to compete with their larger counterparts by granting access to the more profitable routes currently occupied only by the country's three biggest airlines.
China is regarded as the fastest growing aviation market in the world and its general aviation industry is predicted to grow at an annual average rate of at least 10% over the next five years. The Central Government has already indicated a strong demand for general aviation aircrafts for areas such as Public Security, Rescue & Salvage, Agriculture, Forestry, Firefighting, Meteorology, Surveying & Mapping, Sports, Tourism and also for the Business Aviation industry. According to official figures, China is estimated to require 12,000 general aviation aircraft by 2012.
Another potential area comes from the Chinese Government announcement that it will manufacture its own large aircraft, with a minimum of 150 seats, by 2020. The Commission of Science Technology and Industry for National Defense has urged non-state-owned companies to participate. A plan for a jetliner stock company has been approved. Private investment and international cooperation are welcome.
An Airbus A320 assembly line in Tianjin is currently being constructed and will be finished by the end of 2007. This assembly line, with an investment of RMB 2 billion ($263 million), is the first assembly line of Airbus outside Europe. By 2011 the line can produce four Airbus jets a month.
Prospective Buyers and Key Suppliers
Aircraft Prospective Buyers
The main buyers of commercial aircraft are the three state-owned airline holding groups, and a few private airlines, which are listed in the Engines and Parts Prospective Buyers below. Forecasts suggest that in two years ACAC will be the main domestic supplier of regional jets.
Engines and Parts Prospective Buyers
The main buyers of engines and parts are airlines, MRO centers and domestic aircraft manufacturers.
Airlines
China National Air Holding Group Gold Deer Airline
China Eastern Air Holding Group Spring Airline
China Southern Air Holding Group Xiangpeng Airline
Hainan Airline Okay Airline
Shanghai Airline Yinglian Airline
Xinhua Airline Jixiang Airline
Shangdong Airline East Star Airline
Sichuan Airline United Airline
Xiamen Airline Huaxia Airline
China Cargo Airlines China Express
China Postal Airlines Great Wall Airlines
Jade Cargo
MRO Centers
AMECO Beijing--Aircraft Maintenance and Engineering Corporation
GAMECO--Guangzhou Aircraft Maintenance and Engineering Corporation
TAECO - Taikoo (Xiamen) Aircraft Engineering Co. Ltd
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