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AVIC I plans to buy Airbus plants

China could enter Airbus' "Tier 1" international supply team as China Aviation Industry Corp I (AVIC I) has vowed to bid for Airbus' six European production plants. 

While this ambitious plan would have a far-reaching impact on China's development of its own large aircraft, the road to realize this dream could be bumpy, say industry insiders. China Aviation Industry Corp I, a long-time subcontractor of Airbus, said on Tuesday during the Paris air show that it would bid to invest in or buy the six plants Airbus plans to sell. As part of the Power8 restructuring plan, Airbus hives off the plants to save costs. The first three sites will be Filton in Britain, Meaulte in France and Nordenham in Germany. Airbus will bundle the composite material work packages of the A350 in the plants it will sell, Fabrice Bregier, Airbus chief operating officer, said at a press conference in Paris on Tuesday. Airbus is expected to select the first group of risk-sharing partners in summer, Bregier said. The other three sites are Laupheim and Varel in Germany and Saint-Nazaire in France.

„The first problem AVIC I faces could be 'political interference',” said a senior analyst with the Civil Aviation Management Institute of China. „China has expressed a strong will to break the duo-poly of Boeing and Airbus in the global aviation market. Neither the US nor Europe would overlook the possibility of emergence of a competitor,” said the analyst, who declined to be named. Although Airbus has subcontracted manufacturing work to China for more than 20 years, AVIC I is still just a component supplier. „Another problem is whether AVIC I can meet the stringent requirements of Airbus. AVIC I still needs to improve in terms of labor efficiency, optimization of tools, and supply chain management,” said Li Lei, an aviation analyst with CITIC China Securities.

„Airbus is looking for capable partners who can share its development and production risks, not someone creating new risks,” Li said. An AVIC I official told China Daily yesterday that the bidding process would be difficult. „There are many strong bidders and political uncertainties,” the official said on the condition of anonymity. Airbus' Filton plant produces wing parts, with Meaulte assembling the nose sections, including the cockpit, and Nordenham making fuselage shells. Laupheim specializes in cabin interiors and Varel produces complex machined structural components and tooling. Saint-Nazaire assembles, equips and tests the front and central sections of Airbus aircraft. (