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Exclusive Analysis on the Upcoming China Aero Engine Group

Jun 12,2017

(The opinions below do not represent Galleon's viewpoints.)

Aero engine companies to restructure, promoting asymptotic major projects

According to UCAS, that China Aero Engine Group will be formally set up in Beijing. It consists of 46 units (22 aero engine manufacturers and institutes), AVIC 621 (AVIC Beijing Institute of Aeronautical Materials), 3 repair shop and some other small units. After the establishment, the Group Company will become the world's largest Aero Engine enterprise, total assets of 110 billion Yuan. National reinvestment up to 35 billion Yuan, among it 15 billion from the National Development and Reform Commission (NDRC), 10 billion from the Beijing government, 3 billion from AVIC Group, 2 billion from AVIC Commercial Aircraft Engine Co., Ltd (ACAE), 5 billion from China National Petroleum Corporation (CNPC) and China National Offshore Oil Corporation (CNOOC),etc. The president of China Aerospace Science and Industry Corporation (CASIC), Cao Jianguo will take the chairman of China Aero Engine Group, vice president of AVIC Group, Li Fangyong will be in charge of the president of China Aero Engine Group. The newly restructured group will be officially announced and set up on January 25th 2016.

Aero engine system will be completely separated from AVIC Group, setting up a brand new company, to seek independent development. This is an epoch-making event.

The establishment of China Aero Engine Group means the Aero engine system will be completely separated from Aircraft system, promoting large number of major projects and offering more opportunity for China aviation industry.

According to analysts, the establishment of China Aero Engine Group means aero engine system will be completely separated from AVIC Group, promoting major projects brewing since 2012. Minister of Industry and information technology Miao Xu mentioned in his report, in 2016 implementation of major aero engine projects would meet spirit of agreement.

A few days ago, Science and Technology Minister Wan Gang also said that according to the CPC Central Committee and State Council decision, they will pay close attention to the selection of countries reflects the strategic intent to launch a number of major scientific and technological projects and engineering, the first ranked project is the aero engine project, which is emphasized "to prepare the implementation of the program as soon as possible." The China Aero Engine Group¡¯s establishment is in line with qualified standard.

Aero engine technology is filled with difficulty, high risk, it costs large investment and takes long cycle, known as the aircraft manufacturers ¡®crown jewel¡¯. Currently, only five countries could independently develop aviation engines, they are British, France, Unite State, Russia, and China. But China's aero engine is mainly imported, civil aircraft are all use imported products, independent research and development capability falls behind other developed countries. Specialists said that the aero-engine manufacturer-independent out of the aircraft manufacture system is in line with international practice. It will have more flexibility, and maximize R & D efficiency for aero engine manufacturers.

The US National Key Technology Program Documentation described the aviation engine technology as a sophisticated technology which is hard for the novice to access. It requires States to fully protect and use the results in the field, long-term accumulation of data and experience, as well as countries with large investments.¡¯ the implication, aero engine is a kind of significant technology, which cannot share with others.

There is no denying that aircraft is the epitome of manufacturing industry, however, aero-engine, the heart of the aircraft, is worthy of the name of Pearl on the crown in manufacturing industry.

China Aircraft Heart in Bad Need of Replacement

China is always the biggest buyer of aircraft and aero-engines. In order to solve the problem of weak research and developing capability of aero-engine, AVIC has established AVIC Commercial Aircraft Engine Co., Ltd. with state-owned business like Shanghai Electric Group Company Limited whose aim is to meet the needs of research, manufacturing parts of domestic high bypass ratio turbofan engine. However, its development is unsatisfied. The technical difficulties of China aero-engine development read as follows,

According to the resources from media and Internet, the restructure may involve the following companies,

News Source:UCAS

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