By Skies Magazine | February 4, 2016 Estimated reading time 6 minutes, 35 seconds.
Flying Colours is just one Canadian aviation and aerospace company that has focused on expanding into the Chinese market in recent years. Andy Cline Photo
Between 2003 and 2012, the destination of Canadian aerospace products and parts shifted dramatically, as the value of exports to the U.S. declined from 80 per cent to 56 per cent. Meanwhile, the value of exports to the United Kingdom, China and India rose by 81 per cent, 295 per cent and 380 per cent, respectively.
Bombardier Business Aircraft forecasts that the Chinese market will take delivery of 875 business aircraft between 2015 and 2024, making it the third-largest market for new deliveries, after North America and Europe.
A similar ranking is found in the Bombardier Commercial Aircraft forecast, which sees the Chinese airlines receiving 1,550 commercial aircraft in the 60 to 150-seat range between 2015 and 2034.
The long-term market outlook remains strong even with the recent economic slowdown in China.
Flying Colours Corp. of Peterborough, Ont., is just one Canadian aviation and aerospace company that has focused on expanding into the Chinese market in recent years. The company has made an international name for itself in aircraft completions, refurbishment and maintenance.
“When you do business with the Chinese, they will always initiate discussions about opportunities of mutual benefit,” noted Sean Gillespie, executive vice president sales and marketing at Flying Colours. “Companies are looking to grow domestically and internationally, and it is something that always comes up.”
In 2007, Flying Colours began converting 50-seat CRJ100/200 regional jets prematurely retired by airlines into CRJ ExecLiner business aircraft.
Bombardier Business Aircraft liked the quality and hired Flying Colours to do the completions of its factory new Challenger 850s, also based on the CRJ. “We started working with the Chinese market in 2009, when Bombardier contracted us to do ‘full green’ completions of new Challenger 850 business aircraft,” explained Gillespie.
“After we delivered seven or eight Challenger 850 completions to different Chinese customers, we started to get referral work with other Chinese operators.”
Strong demand led Flying Colours to obtain CAAC Part 145 certification for its MRO facility in Peterborough, so it could refurbish and maintain B-registered Chinese jets, especially after it was designated a Bombardier Authorized Service Facility for the Learjet 40/45/60, Challenger 300/605/850, and Global 6000/7000 families.
In the summer of 2015, Flying Colours completed a major Bombardier contract to reconfigure seven new Challenger 870s (a version of the CRJ700) as special mission aircraft with mixed class seating for a Chinese customer. The three-zone interior includes two corporate cabins with four seats each in the forward cabin, and a 40-seat airline interior in the rear.
Chinese MRO certification attracted Challengers to Peterborough for refurbishment; then, in early 2015, Flying Colours began a joint-venture contract with China-based Sparkle Roll Technik Co. Ltd. (SRT) to reconfigure eight Chinese CRJ airliners as mixed-class corporate shuttle aircraft, three of which arrived in 2015.
“To serve the top of the Chinese market you have to build relationships and do a lot of networking to build trust, but you still have to be competitive on price,” said Gillespie.
New production Canadian aircraft manufactured by Bell Helicopter, Bombardier, Diamond Aircraft and Viking Air are also penetrating the Chinese market.
In June, Viking Aircraft of Sidney, B.C., announced the sale of up to 50 Twin Otter Series 400 aircraft to Reignwood Aviation of Beijing. That same month, Harbour Air of Vancouver also announced a partnership that saw Zongshen Industrial Group’s Tianchen General Aviation Co. assume 49 per cent of Harbour Air Group, including 25 per cent of the voting shares.
Both deals are aimed at developing China’s general aviation and commuter airline infrastructure.
“There are cities in China with a million people where the nearest airport is a four-hour drive away,” said Harbour Air founder and CEO, Greg McDougall. “The Chinese government is opening up the airspace under 10,000 feet to aviation traffic, and there is a huge opportunity to develop regional air services and introduce seaplanes as part of the national transportation network.”
With only two amphibious Cessna Caravans flying in China at the time of writing, a lot of educational work is required to familiarize the Chinese market with seaplane operations, as well as with the concept of STOL operations from short runways, which is where Canadian-built aircraft like the Twin Otter and Dash 8 excel.
In mid-October, Sunward Intelligent Equipment Co., a Chinese construction equipment manufacturer, revealed plans to purchase Calgary’s Avmax Group, a large MRO with major facilities in Calgary, Great Falls, Mont., and Jacksonville, Fla., which also owns or manages a large fleet of regional aircraft, including the world’s largest lessor fleet of Dash 8s.
News reports indicated that Sunward planned to raise $347 million in financing to complete the purchase.
On Jan. 12, 2016, Avmax Group announced the execution of a share purchase agreement with Sunward, whereby the Chinese company will gradually acquire 100 per cent of the issued and outstanding shares of Avmax, with completion of the process scheduled for Spring of 2019.
In the United States, Chinese investors have bought well known original equipment manufacturers (OEMs) including Cirrus, Continental Motors, Epic Aircraft, Glasair, Liberty Aerospace and Mooney, and helicopter makers Brantly and Enstrom.
