Chinese Company Gains Work On New Airliner Program

Bombardier Aerospace signed a contract this week in Farnborough with the Shenyang Aircraft Corporation (SAC), a subsidiary of the state-owned aviation industrial entity China Aviation Industry Corporation (AVIC I), to supply the center fuselage on the newly-launched Bombardier CSeries.

"AVIC I signed a strategic cooperation agreement with Bombardier in April 2007. AVIC I attaches great importance to and supports the CSeries project and is willing to participate in this project as a risk-sharing supplier," said Wang Yawei, Vice President, Commercial Airplane, AVIC I. "Two days ago, Bombardier officially announced the launch of the CSeries program. Today, we are here signing the contract in which AVIC I/SAC will take part in the design, manufacture, assembly and relevant testing as well as after market support of four major work packages for the CSeries aircraft. I am confident that the cooperation between AVIC I and Bombardier will further promote the development of the commercial aircraft business of our two companies and contribute to the development of the global aviation industry."

"Shenyang has a long and proud history as an industrial base in China, and we place aerospace as one of our key priorities," said Wang Ying, Vice Mayor of Shenyang Municipality. "The goal of the Shenyang National Aviation and High-Tech Industrial Base -- our industrial hub dedicated to the high-tech aerospace sector -- is to be China's largest single site for final assembly of regional jets, business jets, light aircraft and jet engines. On the occasion of this announcement between Bombardier Aerospace and AVIC I, we are pleased to offer our support to AVIC I as it invests in a new facility in Shenyang for its subsidiary company SAC."

Bombardier says the contract is an integral part of a longstanding relationship between AVIC I and Bombardier Aerospace. Back in June 2007, the two companies announced a Memorandum of Understanding (MOU) for a long-term strategic cooperation in the 90- to 149-seat commercial aircraft market. Both parties expect the outcome of this collaboration to result in mutually beneficial cost reductions and increased production efficiencies for their respective aircraft programs.

In July 2006, Bombardier entered an agreement that stipulated SAC would manufacture certain structural aircraft components for the Q400 aircraft that were previously sourced from Mitsubishi Heavy Industry (MHI) in Japan.

"This is good news for everyone involved. Our Bombardier CSeries aircraft is a true game changer and, with the signing of this contract with SAC, we now have a major supplier for the aircraft's center fuselage," said Guy C. Hachey, President and Chief Operating Officer, Bombardier Aerospace. "Featuring the latest in system technologies and aerodynamics, the five-abreast CSeries aircraft family is specifically designed to meet the growing needs of the 100- to 149-seat mainline commercial airliner market, which is estimated at 6,300 aircraft over the next 20 years. We expect to be able to capture up to half of this market."

For the SAC project, financial, technological and human resources are being deployed from both parties. Currently, 25 employees from China are working at Bombardier's Montreal facilities.

Bombardier employs approximately 3,000 employees in China, participates in three manufacturing joint ventures (JV), has four whole foreign-owned enterprises (WFOE), and four administration offices in transportation; aircraft field service representatives; a parts depot in Beijing and sales representation for business and regional aircraft. Seven commercial airlines and government agencies in Greater China (including Taiwan) operate a total of 46 Bombardier regional aircraft as of January 2007.

FMI: www.bombardier.com, www.avici.com.cn