McDonnell, Chinese Sign Plane Accord

McDonnell Douglas Corp. said Sunday that it reached agreement with a Chinese company that it expects will lead to production of a new 105-seat jet airplane in China.

McDonnell Douglas officials told reporters at the Paris Air Show that the agreement, signed with China National Aero-Technology Import/Export Corp., could lead to the assembly of the aircraft, named the MD-95, by mid-1993.

Under the accord, CATIC would act as a subcontractor to McDonnell Douglas, doing the final assembly of the MD-95 in China and making some components there.

McDonnell Douglas has long-standing ties with China and already has MD-80 jets built there.

The new pact stops short of a full go-ahead for the MD-95 project, which is contingent on finding launch customers for the plane and drafting a legal document to nail down the planned work.

McDonnell Douglas has previously said the program is linked to its reaching agreement on a separate project, known as the Trunkliner program, under which it would build 158-seat MD-90-30 jets in China for the vast domestic market.

“The memorandum of understanding with CATIC provides for the assembly of the (MD-95) aircraft in China as a supplement to the Trunkliner program,” said John Wolf, executive vice president of the company’s Douglas Aircraft Co. unit. “We anticipate final agreement to be reached before the end of the year.”

Boeing Co., the world’s biggest builder of passenger aircraft, is also competing for the Trunkliner program.

McDonnell Douglas also said it signed agreements with Minneapolis-based Northwest Airlines to work on defining specifications for the MD-95 and with Pratt & Whitney, a subsidiary of United Technologies Corp., to offer a new version of its JT8D-200 engine for the plane.

Northwest has a large fleet of McDonnell’s older DC-9 aircraft, which the MD-95 is designed to replace.

Wolf said McDonnell Douglas is also talking with Rolls-Royce Plc about offering its Tay engine on the MD-95, adding that both engines could be offered on the plane.

The MD-95, which would be a shortened version of the MD-87 jet, would enter a market already crowded with competitors.

The Boeing 737-500, the Fokker 100 and the British Aerospace Plc 146 are all rival products and a European consortium plans to build two regional jets in the 80 to 120 seat range.

Airbus Industrie, the European consortium, is also studying plans to build a 130-seat derivative of its 150-seat A320 jet that would fight for the same customers.

While declining to specify a price for the MD-95, Wolf said the plane would match or beat the $20 million to $25 million price range of competing planes. He said the company sees a market of about 1,300.

If the program goes ahead, the first flight would occur in mid-1994 and first deliveries in late 1995.