Approved by the State Council, China Aviation Industry Corporation I (AVIC I) has launched AVIC I Commercial Aircraft Ltd at its manufacturing base in Xi'an, the capital of Northwest China's Shaanxi Province, to build and sell its ARJ21 airliner, said Assistant President Tang Xiaoping.

With an initial funding of 5 billion yuan (US$602 million), the ARJ21, set to fly at the end of 2006, is China's first aircraft designed to meet its market needs and natural conditions, Tang said in an interview with China Daily.

ARJ21, which stands for "advanced regional jet for the 21st century," carries the new company's ambition to become a leading supplier for domestic regional carriers, Tang said.

The move indicates China is advancing into the world's fledgling regional jet market, since the national and international airliner markets are largely monopolized by aircraft manufacturing giants like Boeing and Airbus, analysts said.

The regional jets also target markets in other parts of Asia, Africa and South America, Tang said.

In China, 60 percent of flight routes range between 600 kilometres and 2,200 kilometres, and on average, 80 percent of daily flights are with fewer than 100 passengers, according to Tang.

By building for the shorter flight range and developing advanced regional jets with 60 to 90 seats, AVIC I expects to increase flight frequency for airline operators, reduce operational costs, and lessen the impact of lean seasons on profits, he said.

With five seats in each row, the regional jet is very comfortable for flyers, Tang said.

Moreover, the aircraft's feasibility study has considered the ways to address the complicated natural conditions - mountain ranges and relatively short runways in China's vast western regions, which will make the ARJ21 especially suitable for destinations in the country's west, he said.

Wang Qiming, director of AVIC I's civil aircraft department, said the developers of the ARJ21 welcome foreign capital and expertise.

Already, AVIC I has invited tenders for developing engines and some electronic systems for the airliners, he said.

Sources at GE Aircraft Engines, the world's largest supplier of jet engines for commercial regional jets, said the company is discussing with AVIC I the potential use of its CF34 engine to power the ARJ21.

Facing the fiery market competition from foreign manufacturers, Tang said he believe AVIC I's keen understanding of the Chinese market and conditions, plus its service, will help ARJ21 take a slice of the lucrative global regional jet cake.

"Domestically, we expect to sell at least 300 ARJ21 aircraft within 20 years," he said.

(China Daily September 30, 2002)