Note: Important clarification from an Airbus insider added to story
Aviation Week is confidently reporting a long call that Airbus will do a deal in October to assemble the regional optimised version of the A330 in Tianjin, China, where the European aircraft group already has an assembly line for its single aisle A320s in a venture with the China Aviation Industry Corp.
The story is summarised in the free (on registering) sister site of Air Transport World or ATW.
ATW says in part:
Airbus will sign a deal to go ahead with an assembly line for its long-awaited A330-300 regional aircraft in China, a source at the company told ATW’s sister publication Aviation Week.
“Airbus will sign the deal to build the A330 regional in October this year, with production starting in Tianjin some time in 2016, around 18 months later,” the source said.
The deal to set up the line was dependent on the Chinese government and associated operators pledging to purchase at least 180 of the new variant, according to the source: “But they are pushing for 200 aircraft and, at the moment, that seems likely.”
As recently as last September, Airbus CEO Fabrice Brégier said the new lower weight A330 version would be aimed specifically at countries that had “large populations and fast-growing, concentrated air traffic flows across both regional and domestic markets”—such as China.
“We see strong pent-up demand for [this kind of] aircraft connecting mega cities such as Beijing, Shanghai, Chengdu and Guangzhou,” Brégier said at the Beijing Airshow in 2013. “Operators of [the] new A330 variant will benefit from a proven aircraft that brings relief to limited airspace, airport congestion and pilot shortage.”
Such a deal has been speculated upon for some time, and encouraged in Airbus briefings.
However, an insider in Airbus points out that the group is currently conducting a feasibility study for an A330 completion and delivery centre (cabin equipping and aircraft painting) but this is not an A330 Final Assembly Line.
This makes sense too of the timing, because Airbus is keen to deliver regional A330s to satisfy immediate needs, and final assembly lines or FALS are not exercises that just ‘pop-up’. They are very deliberately planned and resourced ventures.
What is perhaps most interesting about the story is that it adds to a major shift in how globalisation is being seen as working in aerospace, and other activities.
That is, the opportunity it presents is no longer completely predicated on lower costs of production but better sales opportunties.
This is because rising national economies tend to fuel rising expectations and higher labour costs in previously low cost countries.
Causing Airbus for example, to cite the US as having lower production costs than China, and Korean Aerospace also talking about outsourcing from its now higher cost economy to Malaysia, Vietnam and, like Airbus, to the US, where Boeing is busy outsourcing from the higher cost Pacific northwest to the perhaps less skilled but lower cost US south—just like Airbus!
All of which is a reminder that what was true about globalisation arguments in the past may not be as true for much longer.