PARIS/BEIJING (Reuters) - Airbus Helicopters (>> Airbus Group), the world's largest supplier of commercial helicopters, finalised an agreement on Monday to build an assembly line in China as part of a deal to sell 100 H135 helicopters to a local consortium.
The helicopter sale is worth 700 million euros (556.72 million pounds)at catalogue prices, but the value of the deal rises to 1 billion euros when support and initial industrial investment are included, an Airbus Helicopters spokesman said.
The factory will be located in the Sino-German Ecopark in the coastal city of Qingdao, and is expected to start operations in 2018 with a capacity of 36 units a year, the company said.
The deal, first outlined last October, was signed during a visit to China by German Chancellor Angela Merkel.
China is opening up its low-level airspace to civilian aircraft, and the global aviation industry is laying the groundwork for a boom beyond private business jets with the purchase of helicopters that is likely to include fleets of air ambulances.
The light twin-engined H135 is already used in China for medical services and police surveillance.
Airbus Helicopters sees demand for 3,000-5,000 helicopters in China over the next 20 years.
"With the further opening up of the Chinese skies and the increasing growth in the civil and parapublic segments, China is gearing up to be the biggest market for helicopters in years to come," Norbert Ducrot, head of Airbus Helicopters China and North Asia region, said in a statement.
The 100 helicopters are expected to be assembled in China over the next 10 years, the company said.
The Chinese purchasing consortium comprises China Aviation Supplies Holding Company (CAS), Qingdao United General Aviation Industrial Development Company (Qingdao United) and CITIC Offshore Helicopter Co Ltd (>> CITIC Offshore Helicopter Co., Ltd).
Industry analysts said Merkel's visit was not expected to lead to major new deals for Airbus jets.
Airbus got a boost in May by finalising an order for 60 A320neo-family aircraft with China's Spring Airlines (>> Spring Airlines Co Ltd), according to airline industry sources, but the name of the carrier has not yet been officially disclosed.
Airbus declined comment.
(Reporting by Tim Hepher and Winni Zhou; Editing by Geert De Clercq and Susan Fenton)