Companies

AVIC bags big deal in Venezuela

By Lan Lan and Mao Lijun (China Daily)
Updated: 2010-07-13 09:29

The Aviation Industry of China (AVIC) booth at the 13th Aviation Expo China held in Beijing last September. [Bao Fan / for China Daily]

Company to export 25 multipurpose Y-12 aircraft, two helicopters

BEIJING - AVIC (Aviation Industry of China) International Holding Corp has bagged a big overseas contract in Venezuela, sources familiar with the matter said on Monday.

The import and export subsidiary of aerospace conglomerate Aviation Industry Corporation of China signed a contract last Friday with two Venezuelan partners to deliver 25 multi-purpose Y-12 light aircraft and two helicopters, said the sources.

No financial details or a time frame for the deliveries were immediately available.

The contract is part of a framework agreement between the two countries signed in April this year. AVIC had entered into an agreement with Venezuelan fund Fundagrial, and a local company Sireca for aircraft exports.

According to the agreement, the Chinese company will export 33 civil airplanes to Venezuela over the next five years and also provide after-sales and equipment services.

Though the first contract covers only 27 aircraft, the remaining six will be included in a subsequent contract, said AVIC sources.

AVIC was constituted in 2008 by merging China Aviation Industry Corporation I and China Aviation Industry Corporation II.

The airplanes will be produced at AVIC Helicopter Co, a joint venture between Aviation Industry Corporation of China and Tianjin municipal government.

AVIC Helicopter has several units under its umbrella. Prominent among them are Hafei Aviation Industry Co and Changhe Aircraft Industries Group.

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Hafei will make the Y-12 aircraft and Changhe the helicopters. AVIC has exported over 100 Y-12 aircraft to 20 nations from 1986 onwards, said the sources.

Venezuelan Fundagrial, also known as the Fund for Agricultural Development, is an organization that promotes agricultural and regional economic development in central and northern Venezuela.

The organization has teamed with Sireca for an airline venture. The aircraft imported from China will be used by the venture for the transportation of passengers and agricultural goods.

AVIC International was expected to invest $300 million in the Venezuelan venture, according to recent media reports. The company, however, has denied the reports.

"We are selling airplanes to the company and have no relations with its operations," said Liu Yue, a company spokeswoman.

Sources said the Venezuelan deal is the biggest contract for civilian aircraft in recent times.

The framework agreement is expected to bolster aviation ties between the two countries and help boost air services in the South American nation, according to Zhang Guangjian, deputy general manager of AVIC International.

China has in recent years been stepping up exports of civil and defense aircraft. Last year it exported 42 fighter aircraft to Pakistan. Aircraft companies are also exploring new markets like Pakistan, Cuba and Egypt, said analysts.

China is Venezuela's second-largest trading partner, while Venezuela is China's fifth-largest trading partner in South America. According to official statistics, trade between the two countries in 2009 was $7.15 billion.