Kiwi aeroplane $120m deal takes off in China

Pacific Aerospace has delivered the first two of 53 aircraft sold to China firms which amount to $120 million of sales.

Shandong General Aviation has ordered a total of 30 aircraft over three years, while Beijing General Aviation has bought 20, and two other aircraft operators have bought three between them. The delivery was marked by ceremony with the attendance of Trade Minister Tim Groser.

Hamilton-based Pacific Aerospace, or PAL designs aircraft ranging from the CT-4 two seat military plane, to the Cresco agricultural aircraft and the P-750 XSTOL. The firm is vertically integrated in that it designs, makes the parts and builds aircraft.

Last December, the New Zealand aircraft manufacturer gained technical recognition in China, making it easier for local firms to buy its craft.

PAL's Chinese push was assisted by New Zealand Trade & Enterprise, and Trade Minister Tim Groser said the aircraft sales were evidence China was "prepared to pay a premium" for innovative goods and services.

The delivery of aircraft took place at China's Zhuhai Air Show.

Unless you’re a farmer, a skydiver or a plane buff, you might not have heard of the aeroplanes Pacific Aerospace has been building and exporting from its Hamilton factory for the last 65 years.

Here at the China International Airshow in Zhuhai, that’s a different story, with Pacific Aerospace up there with Boeing, Airbus and a bunch of other aviation heavyweights announcing major deals with local companies.

Today Pacific Aerospace CEO and major shareholder Damian Camp officially signed a joint venture agreement with Beijing General Aviation Company to build the New Zealand-designed P750-XSTOL here in China. BGAC is a subsidiary of Beijing Automotive – China’s fourth largest car manufacturer, with an annual revenue of $NZ56 billion – so the partnership is a big deal for the Kiwi company.

“I couldn’t imagine a better technology partner for us,” said Damian, “with BGAC’s manufacturing capability and our proven design we’re well placed to meet the needs of the general aviation sector over here.”

The P750-XSTOL sells for $US1.7 million (for a model designed to carry skydivers) to $US2.2 million for full multi purpose model.

Its key strength is its versatility, with a design allowing it to be easily reconfigured for role including passenger, cargo, skydiving and crop spraying. Its category-leading short and rough-field performance makes it a good fit for the Chinese market too."STOL" is industry-speak for "short take off and landing". Pacific Aerospace added the "X" for "extremely"; the P750 can take off or land on a 244m strip.

So far, two planes have been assembled in China, both making the nine-hour flight from Dong Ying (1hr south east of Beijing) to appear in the show at Zhuhai, alongside Russian jet fighter display teams, the first public appearance of the Chinese stealth fighter and a handling display by the somewhat bigger Airbus A380. BGAC already has 53 aeroplanes on order and both partners expect interest to take off even further by the end of the week-long show. 

Pacific Aerospace, based between Mystery Creek and Hamilton Airport’s main runway, employs around 130. The company has operated under various names since 1949, and has been under its current ownership since 2006. It has sold 665 small planes over the decades.

Mr Camp says the new joint venture could sell 30 to 50 in 2015. "The question is 'how many can we make?'. We're Reviewing our capacity now to see what we can do."

Vaughn Davis flight to China was paid for by China Southern (the subject of a separate article and not affiliated with the companies mentioned in this story). Davis is a former RNZAF pilot, and current RadioLive host, TEDx Auckland director, Unitec council member and owner of The Goat Farm.