Yesterday, Charlotte-based Goodrich Corp. (GR) agreed to form two joint venture companies with China’s Xi’an Aircraft International Corp. (XAIC).
 
According to the agreement, XAIC will form a joint venture with each of Goodrich Landing Gear and Goodrich Aerostructures. The joint ventures will bring together Goodrich’s leading market positions on landing gear and nacelles for large commercial aircraft with XAIC’s expertise in high quality aerospace manufacturing.
 
The new companies are expected to compete for market space for the COMAC C919 single aisle Chinese commercial aircraft. Also, these companies will manufacture various landing gear and nacelle components and subassemblies for other aircraft.
 
Recently, Goodrich opened a new facility in China’s Tianjin Airport Industrial Park to support nacelle and thrust reverser original equipment, as well as maintenance, repair and overhaul activities. This coupled with the above will help Goodrich extend its footprint in China, the world’s fastest growing market for commercial aircraft.
 
Despite the poor market conditions, the company has not changed its expectations for large commercial production rates for 2009. Goodrich continues to expect Boeing and Airbus to deliver a total of 960 to 970 airplanes in 2009. Based on this expectation the company is confident of posting higher large commercial airplane original equipment sales for 2009, compared to last year.
 
However, the airline industry is very sensitive to oil prices, which are very volatile. Although, the huge decline in oil prices from a peak of US$150 per barrel was very positive, the recent spur in oil prices from $35 per barrel in March 2009 to US$71 per barrel currently has again brought back pressure on the industry. It is undeniable that currently airlines all over the world are facing difficulties, primarily due to the collapse of the global economy. Thus, we remain on the sideline until we see any improvement in the airline industry.
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