Chapter 872 Prepare for a rainy day

After completing the task assignment, the specific finalization and identification work was quickly carried out step by step.

Apparently, the project team headed by Chang Haonan is not the only one paying attention to the situation of China Aerospace Engine Industry...

Haojing City, Weiyang District.

Inside the headquarters of Xiluo Company.

Adam Whittle walked into the company door hurriedly with an envelope in his hand, and then walked quickly up the stairs.

Compared to more than two years ago, the layout of the building has not changed much, but the decoration inside has become much more gorgeous.

Whittle and George Breen, who negotiated with Gaojing Engine Group and eventually saved Xilo Company with an M250 engine introduction project, are still jointly responsible for the daily operations here.

It’s not that the two have been standing still over the past few years.

In fact, their remuneration at Rolls-Royce has been raised to a level equivalent to that of deputy department managers.

The pace of progress is quite fast.

However, the importance of CSLO as a platform within Rolls-Royce has progressed faster.

According to general rules, it is even necessary to appoint a department manager who is half a level higher to serve as the British supervisor.

However, the headquarters took into consideration that the two men were familiar with the situation in China and had accumulated a certain network of contacts. If they rashly parachuted in a leader, not only would they most likely be sidelined, but it would also be detrimental to business development.

That is why the situation of “two deputies managing one department at the same time” arises.

Fortunately, the two have completely different specialties and have been through thick and thin together, so they haven't caused any major trouble in the past two years.

Whittle strode along the way and soon arrived outside Brin's office.

The door is open.

The former casually reached out and knocked twice, then walked in.

George Breen was sorting out the business report for this quarter. When he heard the knock on the door, he looked up and saw Whittle sitting in front of him.

However, before the latter could explain his intention, Brin spoke first:

"Adam, you came just in time. I was just about to look for you."

As he spoke, he turned the stack of forms in his hand 180 degrees and pushed it to the other end of the desk.

Before Whittle could pull out the contents of the envelope, he was interrupted and took a look at the report:

“Isn’t this a good growth momentum?”

He pointed to the results above, which showed a 35% year-on-year increase in sales and a 17% year-on-year increase in profits, and said:

If Silo's status is to rise like a rocket, it is definitely not enough to rely solely on the M250 engine that can only power small helicopters and drones.

At most, it could only be considered as a life extension, allowing the company to barely hold on until the next critical time point.

In fact, what really changed the fate of the two men and Xiluo Company was the rapid development of China's aviation transportation industry and the construction of Luzhou Aviation Industrial Park.

This has directly led to an explosive growth in China's investment in the aviation industry in the past two years.

In the past two years, the number of passenger and cargo aircraft purchased by major Chinese airlines is almost more than the total of the previous ten years.

As one of the world's three largest aircraft engine suppliers, Rolls-Royce has benefited from being located in Europe and has reaped considerable benefits from it.

The Xiluo Company, which was not originally established for this purpose, naturally transformed into a large joint venture responsible for aircraft engine maintenance, spare parts storage and turnover, and ground crew training.

It would not be an exaggeration to say that Luo Luo is a part of China.

This, in turn, further increased the market share of Rolls-Royce engines in China.

Among the Airbus A330, A340, Boeing 737 and Boeing 767 newly purchased by China Fortune in recent years, more than % have chosen RB or Trent series engines as their power.

All in all, everything seems to be stable and improving.

And the report in front of Whittle seemed to illustrate this point.

But Brin shook his head:

"On the surface, this is indeed the case, but the hidden dangers are still huge."

He turned to the third page and pointed to a table on it:

"Our business growth this year mainly comes from the additional Boeing 767s and Airbus A340s purchased by China Fortune Land Development the year before last and last year."

"Yes."

Whittle nodded.

"But in my opinion, the subsequent development of these two models is not optimistic, especially the A340. The economics of a four-engine passenger aircraft of this size is too poor, and Airbus is relatively weak in the field of freighters compared to Boeing."

Brin responded:

"As for the Boeing 767, although the order volume and delivery volume in the next few years are still good, the order volume is too stable, without any fluctuations, so I think this may be affected by the agreement reached between China and the United States during the negotiations to join the WTO, and it is not entirely a market behavior."

"When the deadline of this agreement comes, Boeing, at least the sales of Boeing 757 and 767 in China may suffer a setback."

"In other words, although we don't have to worry about anything right now, the sales situation in the next five years or even longer is not optimistic."

Although Whittle was not good at business, he could understand what the other party had said:

"There's nothing we can do about it."

After thinking for a moment, Whittle replied in a somewhat helpless tone:

"We didn't get a share of the pie on the Boeing 737 and Airbus A320, which account for the vast majority of sales. The remaining larger engines have higher profit margins, but sales are much smaller, especially for aircraft like the 767, which also has two engines."

"Plus, China has to reserve enough for the passenger planes it produces, so the size of the pie will be even smaller."

Brin was silent for a moment, then leaned forward and moved a little closer to Whittle:

"We have to do something, Adam."

"The headquarters won't be in a hurry about this matter, but it is very important to the two of us."

For a moment, the office fell into silence.

In order to provide users with more choices and share possible supply chain risks, some passenger aircraft models will use multiple engines or engine-wing combinations.

For example, the power used by the Airbus A320 is either General Electric's CFM56 series or International Aero Engines (IAE)'s V2500 series.

But in fact, IAE is a joint venture established by Pratt & Whitney, Rolls-Royce, Japan Aero Engine Corporation and MTU.

Therefore, for Rolls-Royce of the UK, they can also make money by selling the V2500.

But it is different for Xiluo Company in China, especially Brin and Whittle.

The maintenance and technical training of V2500 will not be left to them.

A true competitive relationship.

Whittle frowned:

"But even so, we can't change the Chinese people's purchasing strategy."

Brin also had a mask of pain on his face.

Convincing others to give up A and choose B between two competing products can still be considered as the scope of public relations.

But convincing them not to give up the A320 and choose the 767 or A340 is probably something that only mind control can do.

Not on the same level at all.

Airlines have a set of decision-making processes when purchasing aircraft. They are not 4S stores. They can put in a budget of yuan and then add money to make it a down payment of yuan.

"If we have to say, we can only focus on new models."

After a while, Whittle came up with a new idea.

"new model?"

Brin quickly reviewed in his mind all the major passenger aircraft models currently under development:

"The new generation 737max and 757 have already been delivered, and the new engine model has not yet been selected, so the only option left is Airbus's A3XX."

"But that's a 550-seat, three-cabin superjumbo... Can it really sell well?"

A3XX is Airbus's super-large passenger aircraft project to compete with Boeing 737.

That is the future A380.

But it hasn't been officially named yet.

However, the sales of its competitor, Boeing 747, in China are not optimistic.

So Brin showed some concerns.

But Whittle isn't too worried:

"China has 12 billion people, which is about four times the population of all EU countries combined."

"Imagine if one-fifth, or even one-tenth of these people use airplanes as their main mode of transportation in the future. What a terrifying scale that would be."

"By that time, they may even need this superjumbo jet for domestic routes."

At the turn of the century, the industry's forecasts for future air transport were still based mainly on hub-to-hub arrangements.

That is, passengers in a region are transferred to the regional center airport via branch airlines, and then transported to another regional center via super-large passenger aircraft.

With this in mind, the demand for passenger aircraft such as the 737 and A380 will be extremely huge.

China's multi-centered human geography is undoubtedly the second market that fits this model, second only to the United States (where the population is concentrated on the east and west coasts).

In fact, even if calculated using a point-to-point passenger model, this conclusion will not deviate too much.

However, at this time, no one could have predicted that China would build a unique high-speed railway network in the future, snatching away most of the passenger traffic that originally belonged to the civil aviation industry...

Therefore, Whittle’s “fighting the future” rhetoric sounds reasonable.

So much so that Brin was convinced without much hesitation.

"This matter can be included in the report to the headquarters at the end of the year..."

He pulled out a pen and tore off a piece of note paper from the side, and wrote down Whittle's thoughts just now:

[The engine selection for the Airbus A3XX project is crucial to expanding the Chinese market...]