SHIJIAZHUANG, China, May 3, 2012 — Cessna Aircraft Company, a Textron Inc. (NYSE: TXT) company, signed a strategic agreement with the China Aviation Industry General Aircraft Company Ltd., (CAIGA) and the Shijiazhuang Municipal Government. This agreement is a progression stemming from the strategic framework that Cessna entered into with CAIGA parent company, Aviation Industry Corporation of China (AVIC), in March 2012. Specifically, this next step forms a cooperation framework for an eventual joint venture whose purpose will be the final assembly, sales, and customer support for the Cessna Caravan in China for the Chinese market.
"It is important to understand that today's agreement is a direct result of the overarching agreement signed with AVIC in March. This agreement picks up where that announcement left off," said Mike Shih, Vice President, China Strategy and Business Development for Cessna. "Not only does this continue Cessna's involvement in the development of General Aviation in China, but it also paves the way for aircraft sales to which we would not have otherwise had access. These Cessna aircraft will be manufactured in the United States, in Kansas, and sent to Shijiazhuang, China, to undergo final assembly and then be sold in China."
Cessna and CAIGA plans include locating the joint venture's operations at the CAIGA facilities in Shijiazhuang to conduct final assembly, painting, testing, interior installation, customization, flight testing and delivery of the Cessna Caravan to in-country customers.
"As a subsidiary of AVIC, CAIGA has demonstrated great capabilities with general aviation production, and this made the choice of the Shijiazhuang facility a simple one," said Lannie O'Bannion, Business Leader for Caravan aircraft. "The cooperation between Cessna and CAIGA will enable us to deliver the Cessna Caravan within China for many different purposes. We have seen interest for the Caravan for use in commuter aviation fleets as well as China's growing tourist and sightseeing businesses. The versatility of the Caravan makes it a great fit for this market."
Scott Ernest, Cessna president and CEO, says: "We continue to be extremely pleased with the cooperative relationship between AVIC and Cessna. China's potential in general aviation is tremendous, and represents an exciting opportunity for Cessna. Since we do expect China to be one of the largest general aviation markets in ten year's time, we are excited to see that it will be Cessna aircraft that will help meet this demand in the years to come."
Cessna is the world's leading general aviation company. Since its inception in 1927, Cessna has designed, produced and delivered more than 192,500 airplanes around the globe. This includes more than 6,100 Citation business jets, making it the largest fleet of business jets in the world. Today, Cessna has two principal lines of business: aircraft sales and aftermarket services. Aircraft sales include Citation business jets, Caravan single-engine utility turboprops, single-engine piston aircraft and lift solutions by CitationAir. Aftermarket services include parts, maintenance, inspection and repair services. In 2010, Cessna delivered 535 aircraft, including 179 Citation business jets, and reported revenues of $2.6 billion. More information about Cessna Aircraft Company is available at cessna.com.
Textron Inc. is a multi-industry company that leverages its global network of aircraft, defense, industrial and finance businesses to provide customers with innovative solutions and services. Textron is known around the world for its powerful brands such as Bell Helicopter, Cessna Aircraft Company, Jacobsen, Kautex, Lycoming, E-Z-GO, Greenlee, and Textron Systems. More information is available at textron.com.
Certain statements in this press release are forward-looking statements which may project revenues or describe strategies, goals, outlook or other non-historical matters; these statements speak only as of the date on which they are made, and we undertake no obligation to update or revise any forward-looking statements. These statements are subject to known and unknown risks, uncertainties, and other factors that may cause our actual results to differ materially from those expressed or implied by such forward-looking statements, including, but not limited to, the risk that the parties will not reach agreement on the specific terms of new joint ventures or that the timing of establishing the new business ventures is delayed; risks and uncertainties related to the launching of new products or programs which could result in unanticipated delays or expenses; performance issues with key suppliers, subcontractors or business partners; changes in worldwide economic and political conditions that impact demand for our products, interest rates and foreign exchange rates; risks and uncertainties related to establishing new facilities; and risks related to doing business internationally.
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