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Airbus' A350 program will see 5 percent of its outsourced work come to China as the world's fastest-growing aviation market will transition to become a fully-fledged risk-sharing industrial partner, the European company announced yesterday.

This is Airbus' first strategy announcement regarding China since rolling out its Power8 restructuring plan last month.

The boon for China's aviation industry is directly tied in to one of the mainstays of Airbus' new operational model. Namely, it pledged to outsource half of A350's aerostructure work to a range of risk-sharing development partners including countries as Airbus seeks to re-manipulate its costs and risks management. As such, it is more than doubling the amount of outsourcing given to collaborators than in earlier programs.

This follows Airbus' 2005 announcement that China would benefit from up to 5 percent of the A350 program's design and manufacturing after Airbus launched its Beijing engineering center. The center, responsible for the design, is 70 percent owned by Airbus, with China Aviation Industry Corp I (AVIC I) holding 25 percent and AVIC II claiming the last 5 percent.

Airbus further confirmed that the new announcement had not changed the original plan.

Laurence Barron, Airbus China president, announced last month that China would enjoy a steady process of increased integration into Airbus' industrial organization moving beyond just being a mere component supplier.

"Despite the management changes in Toulouse, there is absolutely no change in our strategy in China," Barron said. "We have a stronger desire to continue our strategies."

The A350 wide-body aircraft will vie to capture back some of the market dominated by its US rival Boeing's B787 in terms of long-range, mid-sized, twin-aisle planes. The A350 can seat 270 to 350 passengers while the B787 has 210 to 330 seats.

Since rolling out the B787, Boeing has received 464 orders so far, with 60 from China. The plane will enter service next year and will enjoy a five-year hiatus before the A350, with 222 orders so far, muscles in on its airspace. Hedging its bets, China signed a letter of intent for 20 A350s last October.

AVIC I and AVIC II will both provide some B787 components, including the composite rudder and the wing-to-body fairing panels. Meanwhile the Airbus engineering center in Beijing will increase its Chinese engineering staff from 105 to 200 by the end of 2008. 

(China Daily March 9, 2007)