China's aerospace manufacturing concerns, AVIC I & II, poised for merger

With ambitious aircraft manufacturing plans in the pipeline, China is now poised to consolidate the country's aviation manufacturing capabilities and will merge its two leading State-owned aerospace manufacturing concerns AVIC I and AVIC II. The two manufacturers will merge into a single new  company by the end of July.

According to Chinese media reports, detailed merger plans are ready for government approval and the new company will very likely be called the China Aviation Industry Group Corp. The China Daily quoted an official of the China Aviation Industry Corp II (AVIC II) as its source for the story.

According to the unnamed official, Lin Zuoming, AVIC I president, will likely be the president of the new company.

Merger plans are now coming to the fore after the establishment of a company responsible for building large passenger jets last month in Shanghai.

According to AVIC I officials, the new company will act as a parent, or an 'umbrella' company, with new firms specializing in different businesses to be set up under its management. These will mostly be existing AVIC I and AVIC II companies and subsidiaries spread across the country.

AVIC I and AVIC II are two large State-owned industrial groups reporting directly to the central government. Both are existing component suppliers to Boeing and Airbus.

AVIC I manufactures the 50-seat turboprop MA60 and provides components for the ARJ 21, China's indigenously developed regional jet with 70-100 seats.

AVIC II is the country's only manufacturer of military and commercial helicopters. It also manufactures the 50-seat ERJ 145 regional jet in partnership with Brazilian plane maker Embraer.