March 28 (Bloomberg) -- China may postpone the maiden flight of its first passenger jet by at least four months because of supplier delays, said two people familiar with the situation.

The flight, scheduled for this month, is likely to take place from July, said the people, who declined to be named because they aren't authorized to publicly discuss the program. The jet uses parts from Rockwell Collins Inc., Honeywell International Inc., Parker Hannifin Corp., United Technologies Corp. and General Electric Co.

The ARJ21, or Advanced Regional Jet for the 21st Century, is the first step in China's ambition to become a global aircraft maker and capitalize on a domestic market forecast to need as many as 3,400 new planes in the next 20 years. Delays in getting the ARJ21 to market could set back a government plan to build a larger plane by 2020 to challenge Boeing Co. and Airbus SAS.

``Those who had questions about the success of this program will say that this confirms them,'' said Paul Nisbet, an analyst at JSA Research Inc. in Newport, Rhode Island. ``If other factors come into this as it progresses, then it could become considerably more serious.''

China Aviation Industry Corp. I rolled the first 70- to 90- seat ARJ21 regional jet off the assembly line at a Dec. 21 ceremony in Shanghai.

Possible Delay

``We're still doing assessments, and if the results show that certain things aren't up to standard, then we may have to delay,'' Chen Jin, vice president of Shanghai-based AVIC I Commercial Aircraft Co., said by phone yesterday. Chen declined to provide further details of the delay.

Flight International reported the possible delay on its Web site on March 3, citing an unidentified spokesman from AVIC I.

The ARJ21 will enter a regional-jet market dominated by Bombardier Inc. and Empresa Brasileira de Aeronautica SA. Mitsubishi Heavy Industries Ltd. also plans to build a similar- sized plane, Japan's first passenger jet. The ARJ21 will be priced similarly to the $30 million Embraer 175 jet, officials have said.

Engineers are still conducting ground tests and experiments on the ARJ21, said Chen of AVIC I Commercial, which is responsible for assembling and selling the plane. AVIC I, the nation's largest aircraft maker, last month tied up with China Eastern Airlines Corp. to start a new regional carrier to support sales of its own planes. The carrier will use AVIC I's 60-seat MA60 and the ARJ21.

Systems Suppliers

``I would guess that some Western-supplied systems may be behind schedule,'' said Song Yiping, Shanghai-based ARJ21 project manager for Rockwell Collins. ``There are rumors that one or two suppliers might be delayed.''

Rockwell Collins, which is supplying electronics, is on schedule, he said.

``The airplane was scheduled for around this time for its first flight, and it obviously hasn't happened,'' said Rod Beal, the ARJ21 project manager at Honeywell, which is supplying primary flight controls. He declined to comment further. Honeywell spokesman Bill Reavis said the company ``is aggressively working to recover anticipated schedule delays.''

Parker Hannifin, the maker of fuel and hydraulic systems for the jet, and United Technologies' Hamilton Sundstrand unit, the supplier of auxiliary power units, also continue to support the project, spokespeople said.

Shares Fall

Parker Hannifin shares declined 2.2 percent to $66.6 at the end of New York Stock Exchange composite trading yesterday, while Honeywell International retreated 1.1 percent to $55. Rockwell Collins fell 0.1 percent to $56.82 and United Technologies slid 0.3 percent to $69.41. General Electric dropped 0.8 percent to $36.83.

GE's engines for the planes have had ``a successful testing program and we are in an excellent position to meet flight test requirements,'' GE Aviation spokeswoman Deborah Case said in an e-mailed statement.

AVIC I will offer the ARJ21-700 domestically. The company is partnering with Bombardier to develop a stretched 120-seat ARJ21- 900 for overseas markets, Chen Guanjun, AVIC I's president of marketing and international cooperation, said on Sept. 3, without giving a timeline. AVIC I also plans a freighter and a business jet built on the ARJ21 platform.

Flying Phonenix

The plane, dubbed Xiang Feng in Chinese for ``flying phoenix,'' has 171 orders from domestic airlines including Shandong Airlines Co. and Shanghai Airlines Co., according to a statement on AVIC I Commercial's Web site dated Jan. 14. The first flight was scheduled for March 15, it said.

The government of Laos has also agreed to place an order, AVIC I Vice President Hu Wenming said in September.

Looking ahead, the Chinese government and its aerospace companies AVIC I and AVIC II plan to invest ``tens of billions of yuan'' in a company to design and build a 150-seat jetliner within the next decade, AVIC II President Zhang Hongbiao said on March 8 in Beijing.

China, the world's second-largest air travel market, may need as many as 3,400 new planes in the next 20 years, according to Boeing. The nation's previous attempt to build a passenger jet in the 1970s culminated in the Y-10, a 150-seat, four-engine plane that resembled the Boeing 707. Neither of the two Y-10s produced ever flew a commercial flight.

To contact the reporters on this story: Lee Spears in Beijing at lspears2@bloomberg.net; Rachel Layne in Boston at rlayne@bloomberg.net.

Last Updated: March 28, 2008 03:00 EDT