Center

Demand for aircraft to soar

By Lu Haoting (China Daily)
Updated: 2006-10-17 08:49

China had 852 scheduled routes last year, 26 per cent of which had a daily one-way passenger volume of 70 to 250 people, Guan said.

"The Embraer E-Jets will be a good choice for those routes because we are the only aircraft maker for the 90- to 110-seat capacity market," Guan added.

The E-Jet family has four models: the 70-passenger Embraer 170, the 78-seat Embraer 175, the 100-seat Embraer 190 and the 108-seat Embraer 195.

"There is definitely market demand for feeder-line services in China. But the point is how airlines can lower their costs when flying those routes," said Li Lei, an aviation analyst with CITIC China Securities.

A big challenge is the high import duties on small-size aircraft, analysts said.

The combined import tax and VAT (value-added tax) for an aircraft that weighs less than 25 tons is 23 per cent. Regional aircraft are usually within that category. But for an aircraft of more than 25 tons, the combined tax is only 5 per cent.

Guan said the Embraer 190 enjoys the lower import duties because it is heavier than 25 tons.

Embraer sold its first jet to China in 2000; 21 Embraer jets are now in operation in the country.

The company formed a joint venture with Harbin Aircraft Industry Co Ltd in 2003 to produce the 50-seat ERJ 145. The joint venture has delivered 11 jets.