O-Bay Aircraft Co, a privately owned general aviation company based in Henan province, will purchase 100 Sukhoi Superjet 100 aircraft, known as the SSJ-100, for $3.54 billion from Sukhoi Civil Aircraft Co, according to an agree ment the two sides signed on Saturday.
In return, the Russian aircraft manufacturer will jointly establish an assembly line and delivery center of SSJ-100 aircraft with O-Bay in Zhengzhou, capital of Henan province, the agreement states. However, some business insiders expressed reservations about the program.
The SSJ-100 is a regional aircraft with at most 108 seats. It took its first commercial flight in 2011. It is also the first internationally designed civil aircraft made by Sukhoi Civil Aircraft, the parent company of which is Sukhoi Co - a well-known fighter aircraft builder based in Russia.
The Russian aircraft manufacturer will increase its production rate from this year's 43 annually to 50 aircraft in 2015 and 60 in 2016.
According to the schedule, the delivery center will work from 2016, and the assembly line will be completed in 2018.
Two other companies, including a consulting firm and a trading company focusing on aviation, also signed the agreement with the two sides, in order to promote the program.
"Everything about the program is still being planned," said Meng Huawei , chairman assistant of O-Bay, who declined to reveal more details about the purchase and the program.
Meng said the Russian manufacturer was introduced by the consulting firm from Shanghai after talks between O-Bay and Boeing Co about the assembly line failed to materialize.
"The local government is also giving us strong support," he added.
If the assembly line is located in Zhengzhou, it will be the third city in China assembling aircraft with more than 100 seats, after Tianjin and Shanghai.
However, there is still some uncertainty that may stop the program from going ahead.
"Such a large program needs to be approved by the State governments," said Gao Yuanyang, director of the General Aviation Industry Research Center at Beihang University in Beijing .
It is not clear whether the State government will approve it because the city does not have the necessary industrial foundation and professional human resources, he said, despite the local government being passionate about the aviation industry.
If the SSJ-100 is built in China, the Chinese State-owned airplane manufacturer will have a direct rival: Commercial Aircraft Corp of China Ltd is working on the ARJ-21, a regional aircraft with 70 to 90 seats.
Nonetheless, Gao said it is a good time for Chinese enterprises to bring production lines to China from overseas manufacturers because some of them suffered substantially during the financial crises of recent years.
