China Cracks the Aircraft Market by: Jack Perkowski December 05, 2008

2008 has been quite a year for the country’s aviation industry. Over the past six months, China has created a giant new aircraft company to make jumbo jetliners in competition with Boeing (BA) and Airbus; it has merged the country’s two largest aircraft makers into one company; it successfully tested its first domestic commercial jetliner; and it announced orders for the new aircraft from a unit of General Electric (GE).

In May, China formed China Commercial Aircraft Co. (CCAC) to make jumbo jetliners, capitalizing the new company with registered capital of 19 billion yuan ($2.7 billion). The state-owned Assets Supervision and Administration Commission alone invested 6 billion yuan, becoming the largest shareholder. Shareholders of the new company also include China Aviation Industry Corporation I (AVIC I) and China Aviation Industry Corporation II (AVIC II), two of China’s main state-owned aircraft makers.

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