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A Chinese company has agreed to purchase 23 Airbus A320 family aircraft valued at about US$1.2 billion.

China Aviation Supplies Import & Export Group Corporation and the commercial aircraft manufacturer signed a general terms agreement for the purchase in Beijing yesterday.

Li Hai, president of China Aviation Supplies, said his company has enjoyed an excellent relationship with Airbus for many years.

"Through our joint efforts, Airbus can provide more modern and economic aviation products to Chinese airlines, while China Aviation Supplies offer high quality and value-added services to Chinese airlines," Li said.

Gustav Humbert, chief operating officer of Airbus, said Airbus considers China a very strategic and important market.

However, he said Airbus' activities in China are not limited to selling aircraft.

"We are also committed to the long-term development of China's aviation industry through industrial cooperation," he said at a press conference.

Airbus plans to involve China in the development of its proposed A350 program, with a work share of up to 5 percent, Humbert said.

Airbus will offer the Chinese industry a risk sharing participation in the design and manufacturing of the A350 program, he said.

Officials at China's two major aircraft manufacturers, China Aviation Industry Corporation I (AVIC I) and China Aviation Industry Corporation II (AVIC II), were not available for comment.

Both companies have strong interest in producing larger aircraft.

AVIC I is currently developing ARJ21 regional jets on its own, while AVIC II has already begun assembling ERJ145 family jets in its joint venture with Brazilian aircraft manufacturer Embraer.

Humbert said the A350 will be based on the A330, but will feature new wings and engines.

It will offer a greater range, which could compete strongly with Boeing's 7E7 jets.

The A350 program is subject to approval from Airbus' shareholders EADS and BAE Systems, Humbert said.

"A public announcement of the commercial launch is expected within a few days," he said.

The year 2004 is a very significant year for Airbus in terms of industrial cooperation in China, he said.

AVIC I has joined in the production of the A380 aircraft and Airbus will double the volume to US$120 million by 2010, he said.

It was part of Airbus' plans to increase its procurement from China to US$60 million annually by 2007, he said.

Meanwhile, Airbus plans further technology transfer and an initiative in the field of research and development.

Airbus has started to transfer technology to China required for the manufacturing of the complete wing of the A320 family aircraft, he said.

Last month, Airbus announced it plans to set up an engineering center next year in China, with 200 Chinese engineers employed by the end of 2008.

This is a preparatory step to facilitate China becoming a full risk-sharing partner in a future new Airbus program, he said.

(China Daily December 7, 2004)