Business· Markets· Equity

Wanfeng’s Diamond aircraft wins 68.5% share of China’s flight training market, generating profits amid pandemic challenges on global aviation

minutes 2020/09/14 02:42:52

Sep 14, 2020 (China Knowledge) - Twenty-four Diamond DA40 NG aircrafts are expected to join the training fleet of Civil Aviation University of China (CAUC). A popular single-piston aircraft that is known for its fuel economy and ease of operation, this model is set to woo the Chinese market after gaining wide popularity around the world, particularly in North America and many parts of Europe and Asia. Diamond’s new owner Wanfeng Aviation Industry, a subsidiary of Shenzhen-listed Zhejiang Wanfeng Auto Wheel (002085), acquired the aircraft manufacturing business from its Austrian founder, the Dries Family in 2017.

The procurement of the twenty-four Diamond aircraft by the Chinese civil aviation school CAUC was announced on 9 September, and a strategic cooperation agreement was also inked between both parties. The aircraft deal, together with technical support and training services, is likely to pivot the brand and products on a trajectory for Diamond to tap into the burgeoning Chinese market.  

Back in early March this year, Diamond also signed a similar agreement with Civil Aviation Flight University of China (CAFUC), the world's largest flight training institution, and secured a large purchase order. So far, Wanfeng Aviation Industry has become the strategic partner and main pilot trainers supplier of the top 2 aviation institutions in China.

Diamond is reportedly the world’s 3rd largest general aviation aircraft manufacturer, with its in-house design and manufacturing capability of advanced aircraft engine and flight simulator. It possesses independent intellectual property for 8 basic model series and 16 specific models of Diamond aircraft, with manufacturing network in Austria, Canada, and China. The completeness of in-house capabilities and aircraft models uniquely differentiates Diamond from its competitors such as Cirrus, Piper, and Cessna which are all based in the North America.

Published data shows Diamond's market share has gone up to 68.5% among all training aircraft used by China's aviation institutions. Its stellar sales performance could mainly be attributed to its self-developed Austro AE300 engine that is widely known for its fuel-efficiency, reliability, and powerful discharge when on the air. To appeal to a broader customer base, Diamond has improved all its models with wider wheel, sleeker interiors, and other features.

To enhance Diamond’s competitiveness, Zhejiang Wanfeng Auto Wheel, as an industry leader in lightweight automotive parts, has devised a plan to develop lightweight parts for the general aviation industry. As China gradually opens up its air space for civil aviation, Wanfeng has the early mover advantage to capture a trillion-dollar market which may earn itself a "unicorn" in the aviation sector.

Liu Jianping, General Manager of Wanfeng Aviation Industry, firmly believes in a recent interview that his company is poised to achieve sustainable profitability in the general aviation field in the next five years, a rare case in this industry, while its peers are all burning money.

Though the global coronavirus outbreak has wreaked havoc on the aviation industry, Wanfeng Aviation Industry is still able to garner an interim net income of RMB 144 million for H1 2020, 20.05% YoY growth. The company's management team claims to have full confidence in achieving the annual targets.

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