Hongpeng Aviation's Xu Keda: The competition in the aero-engine field has intensified tenfold. It's not advisable for small teams to start businesses in this area | Industry Exclusive Interview
Text | Liu Jingqiong, A Zhi
Editor | A Zhi
Cover Source | Provided by the enterprise
The aero-engine, as the "heart" and "core power source" of an aircraft, directly determines the speed, range, maneuverability, and reliability of the aircraft. Its development involves multiple disciplines such as materials, aerodynamics, control, and combustion. The extremely high design and manufacturing requirements also make high-performance aero-engines one of the representatives of a country's highest level of industrial manufacturing. Currently, only a few countries such as the United States, Russia, the United Kingdom, France, and China have the independent development ability.
The general aviation industry in Europe and the United States started early and has a large market scale. Relying on a century of technological accumulation and low-altitude opening policies, their aero-engine enterprises have formed a market pattern monopolized by giants such as Pratt & Whitney, Rolls-Royce, GE, and Safran globally. Among them, CFM International, a joint venture between GE and Safran, dominates the market, accounting for more than half of the global commercial aero-engine market share.
China's aero-engine industry originated in the 1950s. In the early days, due to foreign technology blockades, it could only start from imitation. In 2016, the Aero Engine Corporation of China (AECC) was established. It is China's first large-scale state-owned aero-engine group that integrates national resources. Since then, China's aero-engine industry has entered a stage of accelerated independent R & D and domestic substitution.
Looking at the development process, the entire aero-engine system in China is built on the basis of military aero-engines. However, the civil aero-engine industry started late and has a weak foundation. There is a gap compared with the international advanced level, and the market supply is insufficient.
Around 2020, the domestic general aviation aircraft market gradually opened up, and the drone market exploded. The increase in the shipment volume of downstream main engine manufacturers also drove the growth of demand for upstream aero-engines. At that time, only the 608th Institute and the 331st Institute under AECC could supply aero-engines below 1000kw required by the fastest-growing small and medium-sized drones. Other aero-engine companies had not completed mass supply. There was still a huge gap in the market supply end, and a number of new startup companies emerged in response to the demand. Hongpeng Aviation is one of them.
Xu Keda, the founder and CEO of Hongpeng Aviation, served in the military for 20 years. During this period, he was responsible for the selection, price review, and supply chain management of key equipment and supporting facilities for dozens of aerospace projects. Years of experience have enabled Xu Keda to form a comprehensive understanding of the aero-engine industry, familiarize himself with the product technology route of aero-engines, and accumulate the contacts and resources needed for entrepreneurship. In 2020, Xu Keda saw the gap in the small and medium-sized aero-engine market, seized the opportunity to enter from a "small cut", and officially founded Hongpeng Aviation.
Since its establishment, Hongpeng Aviation has been focusing on the R & D, production, maintenance, and accessory repair of small and medium-sized aero-engines. The goal is to provide the market with airworthy, low-cost, and domestically controllable power solutions. It currently has three product lines: piston engines, turboprop engines, and hybrid engines.
G150 gasoline piston engine
In the piston engine product line, Hongpeng Aviation currently has four engine products: D160 heavy oil piston, D180 heavy oil piston, G150 gasoline piston, and G360 gasoline piston.
Among them, the D160 is the only heavy oil piston aero-engine in China that has passed the EASA airworthiness certification, and its cost is only 1/3 of international similar products. Currently, the D160 has been applied to models such as Yitong TP500, TP1000, and Tuohang TF500HS, with a cumulative flight time of over 100,000 hours. Hongpeng Aviation is promoting the application for the Type Validation Certificate (VTC) of the D160. If approved, the D160 will become China's first engine with both EASA and CAAC certifications.
D160 heavy oil piston engine
In the turboprop engine product line, Hongpeng Aviation has launched two turboprop engines, TP360 and TP550, targeting imported products such as Pratt & Whitney PT6A, with the goal of achieving domestic substitution. According to the plan, the domestic prototypes of the TP series products are expected to be launched as early as this year, and mass production and small-scale deliveries will start in 2026.
The hybrid engine is a new generation of power product developed by Hongpeng Aviation to address the battery bottleneck and layout for the future. Against the background that the energy density of current eVTOL batteries is generally less than 400Wh/kg, Hongpeng's TE300 hybrid system extends the range through turboshaft power generation, increasing the aircraft's endurance to four times that of pure electric power. This product is planned to be mass-produced by the end of this year.
In less than five years since its establishment, Hongpeng Aviation has grown from a team of three to a team of nearly 200 people. It has successively established a maintenance workshop in Shifang, Sichuan, a R & D center in Zhuzhou, a piston engine mass production base in Zhuhai, and an MRO center in Changsha. It has not only established multiple product lineages, and one of its core products, the D160 heavy oil piston engine, also received an order worth nearly 80 million yuan at the end of last year.
The "fast" progress in product implementation and commercialization is also related to Hongpeng Aviation's "unconventional" startup route choice - instead of starting R & D from scratch, it established a cooperation with the Italian DJ company. Through the model of "international technology authorization + local manufacturing", it established an assembly line and supply chain that meet EASA standards, reducing production costs and prices, and achieved product mass production and a commercial closed-loop in a short period of time.
It is reported that more than 300 D160 piston engines have been delivered globally. This asset-light cooperation path not only avoids the risks of cross-border mergers and acquisitions but also quickly realizes product implementation. 2025 will be a crucial year for Hongpeng Aviation's commercial deliveries and engine mass production.
Such an "unconventional" route naturally has also attracted some doubts about "bringing in" technology. However, in Xu Keda's view, whether it is starting from scratch or bringing in and then absorbing technology, the difference in technological implementation means is not important. The core is to develop products that meet market demand and achieve a commercial closed-loop. "For startup companies, when developing products, they should not pursue the advancement of technical indicators in isolation from market demand. Making money first is the most important thing. On the basis of making money, you can then conduct forward R & D according to different flight platforms and different needs in the Chinese market."
"According to the first - principle, the most important thing for a startup company is to reduce costs through technology, quickly occupy the market, quickly make money, and maintain a stable cash flow." In Xu Keda's view, the aero-engine industry is a high - threshold startup field. Even so, the competition in the entire aero - engine track today is 10 times more intense than it was five years ago. As long as the market demand is growing, more new players will enter the market.
"The (startup) companies that can survive in the end should, first of all, be market - oriented, and second, be based on airworthiness. Simply put, it is 'cheap + safe'. If a company can achieve both, it can survive." Hongpeng Aviation currently has a first - mover advantage in low - cost airworthiness. In Xu Keda's plan, as long as it thoroughly understands the low - cost airworthiness niche market, it is enough for Hongpeng Aviation to become a large and stable - earning company.
Ultimately, he hopes that Hongpeng Aviation will become an aero - engine enterprise centered on control systems, just like Huawei. Through technological investment and independent R & D, it will master the core control systems and cooperate with different downstream terminal manufacturers.
"China has several characteristics: it has money, can concentrate resources to accomplish major tasks, has a huge market, and also has a complete and low - cost aviation industry chain." Xu Keda believes that just like new - energy vehicles, electric aero - engines and aircraft also have the foundation and conditions for overtaking on the curve, and Chinese products are also expected to export their own standards to the world.
The following is a dialogue between 36Kr and Xu Keda, the founder and CEO of Hongpeng Aviation. The content has been edited and organized:
Thoroughly understand the low - cost airworthiness niche market, and it is enough to become a stable - earning company
36Kr: Investors and entrepreneurs often have a certain obsession with innovation. People usually prefer to do everything from 0 - 1 on their own, but Hongpeng Aviation has adopted a "take - and - use" approach in some aspects. How do you handle the relationship between bringing in technology and independent R & D?
Xu Keda: Many people are entangled about whether to "bring in" technology or "independently develop from scratch". I think it doesn't matter. This is just a difference in technological implementation means. The core is to achieve a commercial closed - loop.
You may not expect that the aircraft with the largest global sales volume at present is the Cessna 172 and Piper PA - 28, which were designed in the 1960s and mass - produced in the 1970s. Hundreds of them are delivered every year. Because there are always fixed flight schools that use them to train novice pilots every year. All pilots have to fly this kind of small aircraft before they can upgrade, which is a necessary step.
I'm giving this example to illustrate that startup companies should not develop products in isolation from market demand and simply pursue the advancement of technical indicators. Making money first is the most important thing. On the basis of making money, you can then conduct forward R & D according to different flight platforms and different needs in the Chinese market.
Taking indicators as the priority and taking demand as the priority are two completely different R & D and production ideas. Hongpeng Aviation has now shifted to taking demand as the priority. We believe that indicators based on market demand are reasonable.
36Kr: Is the "bring - in - and - absorb" model a common one for domestic aero - engine enterprises?
Xu Keda: Most enterprises are using this model now. If they don't, they will go bankrupt. They start with reverse R & D and then switch to forward R & D after accumulating experience.
36Kr: Can you give an example to illustrate how "taking demand as the priority" affects Hongpeng Aviation's market selection?
Xu Keda: Many people think that Hongpeng Aviation only focuses on aero - engines, but that's not true. As long as there is market demand, we will do anything related to "going to the sky, into the ground, and under the sea".
Recently, we delivered a marine engine, BG360, which is used on ships for transporting supplies in lake areas. These ships were originally used by fishing enthusiasts in the North American lake areas. One ship can transport 20 to 50 tons of supplies in swamps. The annual demand is more than 2,000 ships, and the demand in the Middle East and Southeast Asian markets is still increasing.
Originally, a ship made in the United States was sold for $150,000, but now a ship made in China is only sold for $80,000. With such a significant reduction in the ship price, low - cost engines are needed for supply and matching. This is a market demand. Once we identify a market demand, we will immediately follow up and develop this market.
36Kr: Does this principle also affect Hongpeng Aviation's technology route selection? What are the next technology expansion plans?
Xu Keda: Yes, I think everything depends on market demand, not on what we currently have. Hongpeng Aviation has only launched three product lines: piston, turboprop, and hybrid engines. It doesn't mean that we can only do these three types. In fact, we can also produce turbojet and turbofan engines. But we will only expand when the market demand really increases.
In recent years, I have gradually realized that the most core part of the entire aero - engine field is the R & D of control systems. In the end, Hongpeng Aviation may become a power system supplier. The prime mover may be our own or purchased from others, but we must firmly control the R & D and production of core components such as the combustion theory and simulation of the entire engine control system in our own hands.
36Kr: There are already many powerful established aero - engine enterprises in the market. Why is there still a need for startup companies like Hongpeng Aviation?
Xu Keda: No matter how large the aero - engine market is and how many powerful companies there are, there will always be some small companies that do well and make money in specific niche markets.
Take turbojet engines as an example. They were originally developed by the French and the Czechs, but now Baoding Xuanyun in China has made small turbojet engines the best in the world, and their shipment volume is calculated in tens of thousands.
Hongpeng Aviation is now focusing on the EASA airworthiness perspective. Low - cost airworthiness is our slogan and what we are currently doing. Currently, no other domestic engines have obtained EASA certification. We are leading in this aspect and have a first - mover advantage. As long as we thoroughly understand the low - cost airworthiness niche market, it is enough for Hongpeng Aviation to become a large and stable - earning company.
36Kr: So who do you want to benchmark against?
Xu Keda: There is no such company yet. We ultimately want to become an aero - engine enterprise centered on control. Currently, there is no company in the industry with the same positioning as ours. There are also only a few domestic aero - engine enterprises that can recognize and achieve control - centered development.
You can see that whether it is Seres or Zhijie, they all use Huawei's control systems at the core. What we want to do is a bit like what Huawei does. We want to master the core control system ourselves and empower different downstream terminal manufacturers. The only difference is that Huawei empowers automobile enterprises, while we empower aircraft manufacturers.
