Airbus plans to open a "satellite" warehouse in Shanghai in the near future, a top company executive said yesterday.

The European aircraft giant will move the spare parts of its wide-body airplanes to the new site and the current storage unit in Beijing will only supply parts for the A320 single-aisle jet and the A380.

"It's a good move for Airbus because we don't have enough space in Beijing now and China Eastern is the first operator of many Airbus aircraft types and has the largest fleet of A300, A310 and A340 aircraft in China," said Laurence Barron, Airbus China president.

Barron said Airbus will not create a new organization in Shanghai but "will rent a space" by cooperating with China Eastern.

He declined to release further details on the amount of capital to be involved and the timetable for using the new warehouse.

Airbus last week celebrated its 20th anniversary of entering the Chinese aviation market and the delivery of its 100th aircraft to China Eastern Airlines. China Eastern, based in Shanghai, is the first Airbus operator in China and has built up the largest Airbus fleet in the country.

Yesterday Barron confirmed that the Airbus (Beijing) Engineering Centre will be a joint venture in which China Aviation Industry Corp II (AVIC II) holds a 25-per-cent share, AVIC I takes 5 percent and Airbus holds the rest.

He said the final joint venture agreement should be signed by the end of this year. The engineering centre will design the A350 parts that will be manufactured in China.

"We are still negotiating with AVIC I and AVIC II about the actual work packages, which will include both metallic and composite structures," Barron said.

"We have to make specific agreements on price, otherwise we must subcontract to elsewhere."

The ultra-long range A350 is expected to enter into service in 2010, two years after its competitor the Boeing 787 Dreamliner is due to enter into service.

Although delivery of the A380 is expected to be delayed two to six months due to "problems on the electrical harness," Barron said Airbus will deliver the first two A380s ordered by China Southern Airlines on time, one at the end of 2007 and the other at the beginning of 2008. China Southern ordered five A380s at the beginning of this year.

The 555-seat double-decker had its maiden flight in April and was expected to enter service next year. Singapore Airlines, the first air carrier to fly A380, is now expected to get delivery by the end of next year, Barron said.

He said "the next most obvious customer" for A380 in China would be Air China, the country's flagship air carrier.

"But they want early deliveries, before 2008, which we are unable to do," he added.

At the end of August 2005, a total of 315 Airbus aircraft had been in service on the Chinese mainland, Hong Kong and Macao, accounting for 34 per cent of the market share. Boeing holds the rest of the market.

(China Daily November 1, 2005)