A report in the Shanghai Daily states that Sukhoi is going to allow China to build a factory to assemble Superjets.  The plan is to assemble 100 of these aircraft.  The Chinese O-Bay Aircraft Co., a privately owned general aviation company based in Henan province will spend $3.5bn on the deal.

The deal has yet to be finalized and it will take two years for the first aircraft to be completed. Two other Chinese firms, China Tianli Aviation Technology and Industry Co. and Shanghai Yuan-Fei Aviation Technology Co.  are also involved.  As one can imagine, absent websites, there is scant information on these Chinese firms.

Sukhoi is taking a chance here.  It has previous experience in dealing with China.  In 2008 Russia reacted with unbridled fury at Chinese copying of the SU-27.  For most people, being able to tell the difference between an SU-27 and a J-11 is tough.  Having been burned once, Sukhoi is going back into working with the Chinese.  It is not clear from the reports what Sukhoi is doing to protect its IP.

For the Chinese there is likely little downside. Acquiring the ability to assemble yet another aircraft only adds to its national aviation skill pool.  After all, Tianli Aviation according to Hoovers’ profile  includes “Motorcycles, bicycles, and parts”.  Assembling an SSJ will significantly upgrade employees skill sets.

Meanwhile COMAC has a similar sized ARJ-21 which appears to be faltering.  This aircraft is also a derivative (to be exceptionally polite) of the DC-9.  Yet it is reportedly overweight and is not doing very well – it is already running eight years late. However,  for us the interest in an aircraft this size could demonstrate that China has a need for aircraft with around 100 seats for its rapidly growing air travel market.  Its growing market could absorb production of the ARJ-21 and SSJ.

It makes sense then for China to add to its national aerostructures skill pool by bringing in another design.  China’s aerospace ambitions are quite clear.  It fully intends to be a world player.  It has previously done work with McDonnell Douglas and Embraer. It builds parts for Bombardier and Boeing.  And it has an Airbus factory churning out A320s.

While the upside for China from an SSJ factory is obvious, the risk for Sukhoi is equally obvious.  This is going to be interesting to watch.  China ordered 200 Su-27s but only took deliver of 105.  By then China had figured out the J-11.  How long will it take for the Chinese to develop an SSJ of their own?

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