October 22, 2014 / 3:53 AM / in 3 years

Airbus Helicopters expects China to become biggest market by 2020

BEIJING (Reuters) - Airbus Helicopters, the world’s largest civil helicopter maker, expects China and Hong Kong to become its biggest global market within six years as Beijing starts to lift restrictions on the use of low altitude airspace from 2015.

A general view of an EC145 helicopter being assembled at the Airbus production facility in Donauwoerth, Southern Germany October 9, 2014. REUTERS/Michaela Rehle

The Airbus Group NV’s (AIR.PA) helicopter division expects to increase its annual sales in China to 150 units by 2020 from around 30-40 helicopters now, its China president Norbert Ducrot told Reuters.

Sales in the United States, the firm’s biggest market, average around 120-150 aircraft per year.

“The China market is very small with a big potential,” Ducrot said in an interview in Beijing. “I am pretty sure around 2020, China will be the first market for Airbus Helicopters.”

“Before (our customers) were mostly state companies, police and fire fighting, but now we can see the emergence of civil private helicopter operators,” he added.

China simplified flight approval procedures for private aircraft late last year, but the fledgling market for helicopters and small aircraft has been constrained by the military’s control of low altitude airspace.

A dearth of small airports, maintenance facilities, mechanics and pilots have also hampered the sector’s growth.

Ducrot said he expects demand for helicopters and small aircraft to pick up gradually when China starts to open up its low altitude airspace next year.

As infrastructure improves and the military opens up more airspace by 2020, Ducrot estimates there will be 50,000 helicopters in China over the next 30 years. There are only about 330 helicopters currently in operation in China, including Hong Kong.

Other small plane makers are also expanding to cash in on China’s growth potential.

Textron Inc’s (TXT.N) Cessna Aircraft Company and Embraer SA (EMBR3.SA) have started assembling business jets in China, while Gulfstream Aerospace Corporation (GD.N) and Dassault Falcon (AVMD.PA) are adding service and maintenance centers in China.

Airbus Helicopters is currently the market leader in China, with customers that include state-backed Citic Offshore Helicopter Co Ltd (000099.SZ). In July, it announced an order for 123 helicopters to three privately owned Chinese general aviation companies, a deal that would effectively double the size of its fleet over the next five years.

In March, it also signed an agreement with Aivcopter, the firm’s long-time government-owned partner, to jointly produce 1,000 EC175 models.

Industry observers say more than 200 general aviation companies, mostly privately owned, are lining up for regulatory approval in China.

Existing companies are also planning to expand their facilities. Beidahuang, China’s biggest general aviation service provider, plans to buy over 40 planes and helicopters, increasing its fleet to around 130 by 2020.

Reporting by Fang Yan and Matthew Miller in BEIJING; Editing by Miral Fahmy

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