As the market economy and
worldwide influence of China grows, so too does the nation's significance to
the U.S. economy. Not only the U.S. are one of the biggest consumers of Chinese
goods, but China is also one of U.S. biggest creditors. With that being said, China has made many
investments within the past years in its general aviation market sector. Chinese authorities will always expect
explosive growth in sector to always continue in the future.
On February 28th of last year,
China Aviation Industry General Aircraft Co. Ltd. (CAIGA) has purchased Cirrus
Aircraft Industries. Cirrus CEO, Brent Wouters, has made a statement that the
sale to CAIGA is sure to boost Cirrus’ Vision single-engine jet program
(Hirschman, 2012). In Wouters
views, the sale of Cirrus marks a major
milestone for the pioneering aircraft manufacturer that introduced airframe
parachutes, glass cockpits, and composite materials to general aviation. CAIGA has the resources that will allow
Cirrus to accelerate its aircraft development and the global expansion of
Cirrus.
In addition of China's investment
in general aviation, in 2012, China has recently purchased Hawker Beechcraft
who filed for bankruptcy protection in May to expedite a prearranged restructuring
of the company and some of its subsidiaries (Hegeman, 2012). The Chinese firm
offered nearly $1.8 billion to purchase the company's business jet and other
aviation operations. However, there
maybe an collapse on the deal due to complication nature of the deal, much of
which was related to the origin of the buyer.
The reasons varies for rapid
growth in Chinese general aviation industry. China has always been a major
production country for the U.S. in which us Americans gives China much profit
alone. The Chinese authorities has been
developing numerous policies including opening low-altitude airspace
specifically for general aviation operations (Koh, 2012). Also, the demand for
corporate aviation plays a big role. Corporations and citizens will be in need
of additional modes of transportation; aviation.
"Emerging markets, in particular China, have kept aircraft manufacturers airborne through a bout of weak demand from Western carriers. Chinese airlines accounted for 20 percent of global aircraft deliveries in 2010, and China’s civil aviation authorities estimate that by 2012 the country will need 2,100 aircrafts, nearly half of those for general aviation. It is also estimated that, for every dollar spent on an aircraft, $6 is spent on supporting sectors, leading to the burgeoning growth of the overall industry (Koh, 2012)."
With expansion taken place in
China, career opportunities will be limited within the United States. The job
market in U.S. aviation will quickly decrease. If China persist on investing
more companies in the U.S., more jobs will be transferred over to China and
other countries. The U.S. will be left
with nothing; particularly in general aviation and that American will have to
relocate else where across the globe for their dream job in aviation.
Thanks for reading
Ryan Pride
Hegeman, R. (2012, July 9). Chinese firm to buy hawker beechcraft for
$1.8b deal. Retrieved from: http://usatoday30.usatoday.com/money/industries/manufacturing/story/2012-07-09/hawker-beechcraft-china/56120442/1
Hirschman, D. (2011, February
28). Cirrus sold to china. Retrieved from:
http://www.aopa.org/aircraft/articles/2011/110228cirrus_sold_to_china.html
Koh, W. (2012).
Aviation in china: ready for take off.
Retrieved from:
http://www.agcs.allianz.com/assets/PDFs/riskfeatures/2011_02_Aviation_in_China.pdf
Lei, Z. (2012, Novemebr 13). Civil aviation industry
ready to take off . Retrieved from:
http://www.chinadaily.com.cn/cndy/2012-11/13/content_15920218.htm
Ryan, do you think with the purchase of these companies in and the knowledge that these foreign markets obtain through the companies that China will be more successful with corporate aviation than the U.S.? Do you think that U.S. Companies stand a chance in competing in their markets and for how long?
ReplyDeleteRyan, there is no doubt that the American general aviation industry has been hurt over the past few years. Do you really see the emergence of Chinese general aviation marking the end of general aviation in America? It seems to me that America has a much wider breadth of knowledge and expertise in the field of aviation, as well as an acute knowledge of the business and how it works. There will likely be more jobs in aviation, as a whole, resulting China's emergence in aviation, but not necessarily fewer American jobs.
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