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Aerospace & Defense Industry Update - Q3 2016

Checking in on China

After some delay, Aero Engine Corp. of China (AECC) was formed in September and we’ve had several clients ask us what we make of it.  The majority of AECC was formed from the engine operations of Chinese aerospace conglomerate Avic.  To that business, several non-aerospace state-owned gas turbine manufacturers were added.  Not much information has been released, but clearly the mandate came from Beijing.  While China does not have a great track record in the aerospace engine manufacturing industry, as China grows its Aerospace industry, home-grown engines are a logical step.  We see this as a further sign that Beijing is serious about creating a world-class aerospace industry. Thirty years from now, China seems likely to have an Aerospace industry that rivals the United States and Europe in scale. Clearly, more and more of our clients are thinking about their China strategy – how will you participate in the opportunities that emerge?

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