Private Chinese firm to buy 100 regional Sukhoi jets

BEIJING (REUTERS) - O-Bay Aircraft Co, a privately owned Chinese firm based in Henan province, has signed a US$3.5 billion (S$ 4.3 billion) deal with Russia's Sukhoi Civil Aircraft to buy 100 SSJ-100 regional jets, a Chinese executive said on Tuesday.

O-Bay Aircraft also plans to manufacture SSJ-100 jets in partnership with Sukhoi and two Chinese companies in Zhengzhou city, Henan province, said the executive, who declined to be named.

"We are still in detailed discussions with Sukhoi for the China assembly plant which would be up and running by 2018. Part of the 100 jets would be manufactured in the China plant," the executive told Reuters, without disclosing financial details of the plant.

O-Bay Aircraft, the executive said, has conducted a detailed study about the growth potential of the Chinese market. It will set up an airline company flying the SSJ-100 jets and sell the jets to other Chinese carriers in the future.

However, global regional jet makers, such as Bombardier Inc and Embraer SA have made little headway in China so far because Chinese airlines, including regional carriers, prefer commercial jets made by Boeing Co and Airbus Group NV.

Safety of home-made planes are also called into question after Chinese aviation authority grounded some of China's self-made MA-60 regional planes last month after two consecutive instances of landing gear failure.

State-backed Commercial Aircraft Corporation of China is also making a regional jet, the ARJ21, as well as a commercial jet, the C919.

Join ST's Telegram channel and get the latest breaking news delivered to you.