Radical reorganization of the Chinese aerospace industry has created an array of specialist companies that policy makers hope will have the focus needed to succeed in the international market. The former twin conglomerates Avic 1 and Avic 2 have been merged back together as Avic. But the key to the reform is the subsequent parceling of their many factories and research institutes into five specialist aerospace companies plus the so-called Defense Div., itself a nascent integrated military contractor.

Singapore Technologies Aerospace, apparently fearless of the worsening economic slowdown, is pushing ahead with expansion and hiring plans for its global maintenance, repair and overhaul operation. ST Aero is even open to further expansion through acquisitions, which it thinks should become cheaper as excess capacity piles up in North America and Europe. Development of unannounced new facilities, probably in Asia, is also in the cards.

China Eastern Airlines is likely to shrink, with executives revealing plans to freeze its fleet size this year while offloading subsidiaries and even part of its mainline operations. The plans are among a range of measures that management will adopt to turn around the unprofitable carrier, the smallest and weakest of China’s Big Three (DAILY, Jan. 13). China Eastern hopes to delay or sell all aircraft it is due to receive this year, with the aim of keeping capacity unchanged, the company tells Reuters. China Joy Air