China's leading aviation company reports 215 percent profit rise

China Aviation Industry Corp II (AVIC II), one of the country's leading minicar and helicopter makers, revealed its profits rise of 215 percent in 2004 over a year earlier, China Daily reported Thursday.

But the company, parent of the Hong Kong-listed AviChina Industry & Technology Co Ltd, did not disclose the monetary value of these profits.

The company achieved a sales income of 35.7 billion yuan (4.3 billion US dollars) in 2004, an increase of 12.2 percent, President of the company Zhang Hongbiao was quoted as saying.

In 2003, the company's sales income was 23 billion yuan (2.8 billion dollars), a year-on-year increase of 11.4 percent.

AVIC II is the largest minicar maker in China with more than 30 percent market share. And it is also the only domestic mass producer of helicopters and regional jets in China.

The company sold 314,000 cars in 2004, Zhang said, sales of auto parts grew 25.1 percent and car exports rose 200 percent year on year.

While the car business continued to generate a majority of the company's income, aviation products including helicopters and regional jets began to contribute more, he said.

The company delivered 88 helicopters and aircraft to its customers last year, and as China's economy expands further, AVIC II is pinning hopes on the aircraft business to drive future growth, Zhang said.

AVIC II has a 49 percent stake in a joint venture with Brazilian aircraft manufacturer Embraer to assemble the Brazilian firm's jets in China, the paper said.

Last year, the company delivered five ERJ145 jets to China Southern Airlines, which has agreed to buy six of the aircraft.

Industry experts said China is set for a boom in regional aviation, due to the pace of the economy, the central government's decision to develop western regions and the upcoming Beijing Olympics in 2008.

They expect there will be demand for as many as 500 small aircraft across China over the coming 20 years.

This year, the company aims to increase all its major economic indicators by 10 per cent, according to Zhang.