Aerospace Industrial Development Corp (AIDC, 漢翔航空工業), the nation’s largest civilian and military aircraft manufacturer, on Wednesday downplayed the potential effects of a US-China trade war on its business.
The company, a major supplier for aircraft and aircraft engine makers, would not be affected by US President Donald Trump’s decision to impose tariffs on steel and aluminum imported into the US, as the firm and its clients do not source materials from China, AIDC chairman Anson Liao (廖榮鑫) told an investors’ conference in Taipei.
Not all aircraft would be affected by China’s 25 percent tariff on US-built airplanes, which applies to aircraft with empty weights of between 15 tonnes and 45 tonnes, Liao said.
Boeing Co’s older 737 Next Generation models would be subject to the Chinese tariff, while the newer, heavier Boeing 737 MAX family of aircraft fall out of the weight range defined by Beijing, he said.
Meanwhile, as Commercial Aircraft Corp of China Ltd’s (中國商飛) C919, China’s first indigenously developed jetliner, has yet to receive certification, Chinese airlines would likely mitigate the effects of the tariff on Boeing aircraft by redirecting orders to rival Airbus SE, which is also a major AIDC client, Liao said.
AIDC has long-running partnerships as a supplier with both aircraft makers, he said.
About 90 percent of the output of the firm’s engine parts plant in Kaohsiung’s Gangshan District (岡山) is destined to be installed in Boeing or Airbus aircraft, he added.
Aircraft makers are this year expected to accelerate their phaseouts of CFM International’s CFM56 engines, which are being replaced with CFM’s next-generation LEAP engine, Liao said, adding that a lull in the transition period last year dented AIDC’s engine casing sales.
AIDC is set to receive certification from the US Federal Aviation Administration in June that would allow it to tap into the market for commercial aircraft seating, he said.
Although the seating business is not expected to significantly contribute to revenue immediately, the company must expand into new fields to ensure growth as its major clients continue to demand price cuts, he added.
The company’s contracts to upgrade the air force’s F-16A/B fleet and to design and fly a prototype advanced jet trainer are proceeding on schedule, AIDC president Lin Nan-chu (林南助) said.
The firm reported that sales in the first quarter of this year rose 5.1 percent annually to NT$6.2 billion (US$211.32 million).
It has not released bottom-line figures for the quarter.
Last year, AIDC saw net income dip 16 percent annually due to a weaker US dollar, with earnings per share of NT$1.86, despite sales reaching a record high of NT$27.5 billion.
The company plans to distribute a cash dividend of NT$1.13.
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