AviChina down 5% ahead of Airshow China – Suppliers Share Wrap
AviChina shares tumbled 5% in a generally bleak day for aerospace suppliers. Other companies to suffer large falls were Meggit (-4.7%), Rolls-Royce (-3.7%) – still dealing with its Trent 900 issues – and GKN Aerospace (-3.2%).
Next week will be a big one for the Chinese aerospace industry, with Airshow China due to be held in Zhuhai between 16-Nov and 21-Nov. Commercial Aircraft Corporation of China (COMAC), the Chinese state-owned manufacturing conglomerate, is expected to announce its first order for its new C919 narrowbody. The company is coming into the show on a high, having also announced it commenced assembly of the first ARJ21 production aircraft earlier this week. The ARJ-21 will make is show debut next week.
Competition at the show will be stiff. Airbus and Boeing have a heavy installed base of aircraft, and both have reported recent successes with Chinese customers this, particularly for narrowbodies. This month alone there have been orders for 30 A320s from BOC Aviation, the Singapore-based aircraft leasing subsidiary of Bank of China, and an order for 50 new A320-family aircraft made by the state-owned China Aviation Supplies Holding Company. For Boeing, Okay Airways and Xiamen Airlines have placed orders for 10 B737NGs each, while Air China ordered 20 B737NGs earlier in the year.
The indications are that while COMAC expects heavy support from the state and local carriers, it won't have everything its own way as it tries to break the duopoly of Airbus and Boeing in narrowbody aircraft.
Selected Original Equipment Manufacturers daily share price movements (% change): 09-Nov-2010
Selected Aviation Suppliers & Leasing daily share price movements (% change): 09-Nov-2010