Bombardier, Embraer and Honeywell signing deals in China
Bombardier, Embraer and Honeywell have announced a number of deals in China, related to the country's booming aerospace industry and the development of its first indigenous large commercial aircraft, COMAC's C919. Shares in Honeywell gained 1.1% in trading yesterday, while Bombardier shares rose 1.9%, Embraer was up 2.2% and shares in AviChina gained 4.7%.
With both COMAC and Bombardier attempting to break the stranglehold that Airbus and Boeing have on the large commercial aircraft market, the two signed a framework agreement to establish a long-term strategic cooperation on commercial aircraft. The collaboration will see them exploring relationships in their marketing, customer relationship and customer support strategies to help each other increase overall market share. The companies will evaluate possibilities for cooperation with regards to C919/CSeries aircraft programme commonalities, joint procurement as well as collaboration on future Bombardier and COMAC product lines.
Embraer and ABC Financial Leasing Co signed a MoU on aircraft financing and leasing, designed to create new financing opportunities for Embraer to sell aircraft in China and other markets, with a focus on the development of China's regional, executive and agricultural aviation markets. The agreement could come to as much as USD1.5 billion over the next five years.
Honeywell announced it will form up to three JVs in China this year to supply systems for the C919. Stakes in the JVs will be 50-50 or 51-49 according to Honeywell. New JVs are planned to be established with:
- Hunan Boyun New Materials Co: Wheels and brakes;
- AVIC Flight Automatic Control Research Institute: flight control facilities;
- AVIC Harbin Dong'an Engine (Group) Corp; Auxiliary power unit;
Honeywell has already signed an agreement with AVIC Chengdu CAIC Electronics Co Ltd to develop the navigation package for the aircraft. Honeywell also intends to sign four MOUs with the Aviation Industry Corp of China within the next three months. The MOUs will cover air traffic management systems, engine R&D, avionics systems for jet aircraft and helicopters and manufacturing of aerospace components.
Selected Aerospace daily share price movements (% change): 24-Mar-2011
