China’s two main aircraft-making groups, Avic 1 and Avic 2, will merge back together, nine years after they were separated, industry executives say. The merger is the next step in China’s long campaign to turn its aircraft sector into an internationally competitive industry that operates on a fully commercial basis. The combined business will be heavily involved in making aircraft parts, while the new Commercial Aircraft Corp. of China (CACC) separately pursues the national project of building a mainline airliner to complement the current ARJ21 regional jet.

China’s two main aircraft-making groups will merge back together as a step toward simplifying and rationalizing the industry, especially in the military subsector. The re-merger of Avic 1 and Avic 2 is expected to happen this year, nine years after they were separated. It may be a prelude to pulling the industry apart again to create a range of national champions focused on different parts of the aircraft-making business.

Vietnam is seeing a surge in airline hopefuls and an enthusiasm on the part of investors similar to what has been happening in Indonesia for the past few years. An early group of start-ups have fallen by the wayside, but there are more eager to take their place. A similar situation is emerging in South Korea as well.