A Retrospective on China’s Aircraft Cabin Industry

The Chinese aircraft interiors industry is a domain which has seen spectacular development in recent years, both through organic growth and international acquisitions.

China’s aircraft interiors industry before the 2000s is unclear. Although it is very likely that some form of industry existed due to China’s development of military aircrafts, we may only presume that it was very weak in the civilian aircraft sector due to the complexity of aircraft seat requirements and certification.

Today, AVIC Cabin Systems is a export-oriented Chinese-owned international group, catering for the needs of OEMs regarding aircraft interiors. Its products cover a very broad range of needs, including aircraft seats, galleys, monuments, etc; It has prestigious clients such as Emirates or Qantas, and its product portfolio ranges from entry-level economy-class to high-end business and first-class systems.

How did AVIC develop such a diversified cabin industry in just 10 years? What are the implications? The following blogpost revisits the history of this new Chinese player, as well as the implications for the global aerospace industry.

Overseas acquisitions started in the late 2000s

AVIC’s strong presence in the cabin system market began with a series of 3 key acqusitions in Western countries: FACC (Austria), Thompson Aero (UK) and AIM Altitude (UK), between 2009 and 2016. Each acquisition contributed significantly to the product portfolio of AVIC Cabin Systems and would enhance the development of other AVIC subsidiaries. 

FACC: Future Advanced Composite Components
facc header
China’s first overseas acquisition in the sector targeted Austria-based FACC (Future Advanced Composite Components) in 2009. Founded in 1989 as a spin-off of the Austrian ski-manufacturer Fischer GmbH, FACC is specialized in making composite parts for aircraft cabins, engine nacelles, wings and other structural components. Well integrated in the international aviation supply chain, it counts among its clients prestigious players like Airbus, Boeing, Bombardier, Rolls-Royce and Pratt & Whitney [8].
The leading aerospace company in Austria, FACC also represents the very first Chinese acquisition of a Western tier-one supplier [3][8]. In a difficult situation in 2009 (partly due to the problems with the A380 and B787 programs), the acquisition by AVIC’s Xi’an Aircraft Company (XAC) brought FACC a welcome flow of capital and enabled it to invest in manufacturing capabilities [1][5][8]. On AVIC’s side, FACC represented a strategic move to enter the international supply chain, and have access to key Western know-how in composite materials. [1][5][7]

AIM Altitude
aim altitude header

In May 2016, China made another major acquisition: AIM Altitude, a British company making galleys, stowages, bars and other premium monuments based in Bournemouth. Along with a strong premium product portfolio, the other major appeal of AIM Altitude is a very significant international coverage. Itself a merger of the former AIM Aviation (UK) and Altitude Aerospace Interiors (New Zealand), it has excellent links with both Airbus and Boeing, and covers airlines in Far Eastern, Australasian, European, North American and Middle Eastern markets [10][11]

Thompson Aero:
Thompson Aero headerIn December 2016, AVIC further continued international acquisitions, snapping up Thompson Aero Seating, a Northern-Irish company making premium Business and First-Class aircraft seats, for both Airbus and Boeing. Again, Thompson Aero Seating’s product range and strong international presence complemented nicely other AVIC acquisitions, as well as AVIC’s domestic cabin interior subsidiary companies (see below). [12][13]

Domestic Players

These international acquisitions were carried out in parallel to a consolidation of the Chinese aircraft cabin industry.

AVIC ALI Jiatai (湖北航宇嘉泰)
ali jiatai logo
Hubei Ali Jiatai (湖北航宇嘉泰), based in Xiangyang, was formed in 2010 as China’s main domestic manufacturer of aircraft seats, but also producing galleys and toilets. Its main focus so far has been economy-class seats, and also has a similar offer for the train industry. [14]
Hubei Ali Jiatai is naturally the reference supplier of crew and passenger seats for Chinese-manufactured aircrafts, namely the MA60, MA600, ARJ21, and the future MA700 [15][16]. It is a “Gold Supplier” of the main Chinese turboprop aircraft manufacturer Xi’an Aircraft Corporation (XAC) [16].
Hubei Ali Jiatai’s economy-class seats (KKY400, KKY420) have also recieved their TSO approval by the FAA as early as 2011 and 2016 [16]. More recently it was listed as a supplier for Boeing and Airbus, receiving its BFE certificate respectively in 2013 and 2017 from Boeing and Airbus [16][17][18][19]. Sales so far have been limited to domestic carriers, such as Kunming Airlines (2017-2020 B737 deliveries), 9 Air (2016- B737 deliveries) [20], and discussions were underway with China Southern and Hainan Airlines in 2018 according to the local news [21].

Fesher Aviation Components (菲舍尔航空部件)
fesher logo
Similarly, Fesher Aviation Components, based in Zhenjiang, was founded in 2011 as a joint-venture between AVIC and Zhenjiang New District High-Tech Industrial Investment. Fesher specializes in composite material parts, for both aerostructures and aircraft interiors. All of its factory layout, design and equipment specifications were provided by Austrian company FACC, which at the time had already been acquired by AVIC. Fesher Aviation Components has since acted as the Chinese counterpart of FACC, benefitting from its consultancy, serving as part of its supply chain and covering subcontracting work in FACC’s programs relocated from Austria to China. [22][23]

Consolidation into AVIC Cabin Systems

At this point, although all five companies (FACC, AIM Altitude, Thompson Aero, Ali Jiatai and Fesher) were part of the AVIC conglomerate, each player operated independantly and under different ownership schemes: Ali Jiatai is a subsidiary of AVIC Aerospace Life-Support Industries; Fesher is a joint-venture between AVIC XAC and other Chinese players; XAC has the majority stake in FACC; and AIM Alititude was acquired by AVIC International [27] and Thompson Aero Seatings by AVIC Capital [31].

Although strong ties had been undergoing between them, overall branding and governing coherence was actually kicked off in 2018. In April, visitors at the Aircraft Interiors Expo in Hamburg could observe that the aformentioned companies were exposing under one banner, named “AVIC Cabin Interiors” (see picture below) [28].

avic cabin interiors.PNG

Finally at the 2018 Farnborough Air Show, AVIC revealed the creation of a new holding structure, AVIC Cabin Systems, headquartered in London and effectively uniting all five players under one name [29], although each company continues to operate independantly.

avic cabin systems

What this means for the global industry

AVIC Cabin Systems marks the establishment of one of the first real global players of the Chinese aviation industry. Offering a complete aircraft interiors portfolio, providing entry-level and high-end products, combined with a strong international presence, ACS represents a new and serious competitor for the industry leaders, among which are Rockwell Collins (B/E Aerospace) and Zodiac Aerospace.

In May 2018, Richard Aboulafia explained in Aviation Week how China, unlike others  such as Brazil and Japan which have integrated the global supply chain, is pushing home-grown entities selectively and restricting ties with foreign suppliers [30]. This has been true to a very large extent, as seen with the conditions imposed on Western suppliers of the C919, the development of AECC, etc.
However, a player like AVIC Cabin Systems shows the possible emergence of China as an international aerospace player that incorporates itself into the global supply chain. Admittedly, AVIC Cabin Systems also serves Chinese objective of pushing for IP: Fesher has benefitted immensely from FACC’s guidance and relocation of manufacturing in China; and AVIC seems also to be pushing its composite material providers to supply FACC [2]. It is also a way to better control the supply chain for its current and future aircraft programs, of with FACC is already one of the important suppliers (COMAC AJR21 and C919). Only time will tell the true intentions of AVIC, meaning that ACS will be a very interesting company for the industry to follow in the years to come.

 

Sources

[1] http://aviationweek.com/new-civil-aircraft/austrias-facc-plans-strong-growth-new-products-acquisitions/
[2] http://www.acc.avic.com/EN/contents/53/822.html
[3] http://www.china.org.cn/business/2009-12/04/content_19006159.htm
[4] https://www.reuters.com/article/us-facc-xac/chinas-xac-buys-austrian-plane-parts-maker-facc-idUSTRE5931LT20091004
[5] https://www.compositesworld.com/news/facc-expands-its-business-in-china
[6] https://www.compositesworld.com/articles/facc-timeline-engineer-centric-evolution
[7] http://aviationweek.com/zhuhai-2014/xi-s-facc-grows-composites-china
[8] https://www.researchgate.net/publication/291497094_Avic_aircraft_buys_Austria’s_FACC_supplier_to_airbus_and_boeing
[9] https://www.flightglobal.com/news/articles/facc-to-start-manufacturing-fan-cases-for-pwc-445416/
[10] https://www.mro-network.com/maintenance-repair-overhaul/aim-aviation-acquires-altitude-aerospace-interiors
[11] https://www.ainonline.com/aviation-news/2014-09-24/aim-aviation-acquires-new-zealands-altitude-aerospace-interiors
[12] https://www.belfasttelegraph.co.uk/business/news/thompson-aero-snapped-up-by-chinese-aviation-giant-avic-35306218.html
[13] http://www.irishnews.com/business/2016/12/20/news/china-flies-in-to-take-front-seat-at-leading-exporter-844417/
[14] http://www.alijt.com.cn/index.html
[15] http://www.maaircraft.com/Home/Article/show/id/160.html
[16] http://www.alijt.com.cn/About_us/
[17] http://www.alijt.com.cn/xinwenzhongxin/gongsixinwen/62.html
[18] http://www.alijt.com.cn/xinwenzhongxin/gongsixinwen/60.html
[19] http://www.alijt.com.cn/xinwenzhongxin/gongsixinwen/37.html
[20] http://www.chinaaviationdaily.com/news/47/47999.html
[21] http://www.xf.gov.cn/news/xyxw/xyyw/201801/t20180117_873351.shtml
[22] http://www.fesher.net/about.asp?id=5
[23] https://www.compositesworld.com/news/facc-expands-its-business-in-china
[24] http://www.airframer.com/news_story.html?release=40313
[25] http://aviationweek.com/zhuhai-2014/xi-s-facc-grows-composites-china
[26] https://www.flightglobal.com/news/articles/a330neo-cowls-to-be-built-by-facc-405655/
[27] https://www.aimaltitude.com/company/history/
[28] http://www.cannews.com.cn/2018/0413/173921.shtml
[29] http://europe.chinadaily.com.cn/a/201807/17/WS5b4ce3e8a310796df4df6c4b.html
[30] http://aviationweek.com/commercial-aviation/opinion-china-s-misguided-grab-aerospace-ip
[31] http://vip.stock.finance.sina.com.cn/corp/view/vCB_AllBulletinDetail.php?id=3856999

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