China’s first large passenger jet aimed at home market

May 28, 2014 by Nick Compton

If all goes according to plan, the COMAC C919, China’s first domestically made large passenger aircraft, is set to launch its maiden flight by the end of next year, marking a milestone in the country’s aviation industry.

In time, the plane’s manufacturer, the Commercial Aircraft Corporation of China (COMAC), expects to challenge Boeing and Airbus in the global aviation market.

“I have no doubt Chinese leaders want a viable, global competitive aerospace industry. They are a world economic power…they’ve gone into space, why not aerospace?” said Scott Hamilton, an aviation expert and managing director at consulting firm Leeham Co. “To do so, you have to compete with the big dogs.”

But for COMAC, a novice in the global aviation industry that has been marred by countless delays and frequent missteps, success is anything but certain. And for everyone involved, the stakes are huge.

China’s commercial aviation market is currently the second-largest in the world, after only the US. To keep up with surging demand for air travel from China’s expanding middle class, over the next 20 years Chinese airlines will need to add 6,000 new airplanes, valued at $780bn, according to Boeing. For its part, the Civil Aviation Administration of China (CAAC) plans to establish more than 80 new Chinese airports by 2020, many in second-tier and inland Chinese cities.

According to Li Jiaxiang, the director of the CAAC, building an airport is a lifeline for local economies, which he estimates can draw on an airport to generate economic returns at eight times its cost.

All of this means big business for state-owned COMAC, which was established in 2008 under the auspices of the State Council with a mandate to design and manufacture aircraft for the civil sector. COMAC has since focused its efforts on two multi-billion dollar projects –the narrow-bodied C919, a passenger plane capable of seating around 170 passengers with a range of up to 5,500 km, and the ARJ21, a smaller, regional jet that can seat around 100 passengers.

Development has been turbulent for both programs, however. Despite first being planned by COMAC’s predecessor, the ACAC Consortium, in 2005 and taking its first flight in 2008, the ARJ21 is yet to receive certification from either the CAAC or the US’s Federal Aviation Administration (FAA). The company says it has pegged at least 252 orders for the jet from mostly domestic carriers and plans for certification to take place later this year with commercial service following. Still, the perpetual delays and uncertainties have dented the ARJ21’s competitiveness and cast doubt on COMAC’s competence.

“I’ve always viewed the two programs as learning experiences for the emerging Chinese aerospace industry.” Hamilton said, adding that growing pains are inevitable as China’s aerospace industry is essentially starting from scratch. “The next generation of airplanes will be the ones I view as more competitively threatening to Airbus and Boeing.”

The C919, the crown jewel of COMAC’s efforts, is designed in the same vein as the hugely popular Boeing 737 and Airbus A320. Its striking resemblance to the latter is perhaps no coincidence, as Airbus has an A320 assembly plant in Tianjin.

The aircraft’s layout and fabrication are entirely domestic endeavors, but for now it relies on foreign technology for many core parts, including its engine, which is made by General Electric

According to Rob Morris, head of consultancy at Ascend Aviation Advisory, up to now there have been 275 “firm” orders for the C919 from 12 domestic customers, with another 75 lease contracts from four firms. General Electric’s aviation leasing company, GECS, is so far the only foreign buyer with an interest in 20 airplanes that Morris says is driven mainly by their involvement in the aircraft’s engine design.

“We see C919 as being a key programme for COMAC to prove its competency as a large commercial aircraft OEM.” Morris said. “There is undoubted demand for the aircraft and on paper it looks broadly competitive with A320 and 737.”

After taking its maiden flight sometime in 2015, COMAC expects C919’s to go into service in late 2016 or early 2017. Ascend predicts that over the next 20 years, the C919 will rack up 900 sales (4% of the overall single-aisle airplane demand over that period) with 80% of those sales inside China. To put that in perspective, over the same period, Ascend expects a total of 19,000 Airbus A320 and Boeing 737 family sales.

Creating a robust and globally competitive aerospace industry is a core goal of the Chinese government, as highlighted in the 12th Five-Year Plan (2011-2015). The plan lumps the aviation industry into the “high-end” equipment sector and states that building “an industrial platform for domestically made trunk and regional aircraft, general aviation aircraft and helicopters,” is a key priority.

To this end, the government has ploughed cash into developing the industry. Over the next few years, consulting firm Kuick Research estimates the Chinese Government will spend $250bn to build up the aerospace industry, with $7bn already spent on the C919 program alone.

Despite the flood of investment from state coffers and a steady stream of orders from domestic carriers, serious questions remain for COMAC. A recent report by the RAND Corp., an American-based, non-profit research group, blasted the C919 and ARJ21 programs as doomed to failure owing to the imminent release of new models from Boeing and Airbus, paired with the Chinese company’s inexperience in sourcing, systems integration, and the complex politics of flight certification.

“Even when these planes are fully realized, they are not likely to be competitive with commercial aircraft now available,” Scott Harold, a co-author of the report wrote. “The Chinese government will then need to face a decision of whether to spend billions more to develop a new round of planes that may or may not be competitive.”

Proponents of the program fired back at the report, arguing that Boeing and Airbus both underwent similar struggles at their starts and that improvement comes only with time.
Meanwhile, on 16th May COMAC reported successful manufacturing of the first major part of the C919, the forebody, constructed of 1,600 separate pieces. According to Xinhua, the company expects final assembly to be completed in the second-half of 2014, with a test flight following in 2015.

For COMAC and the Chinese Government, completing an aircraft as a beacon of technological progress is an urgent point of national pride. But, whether that aircraft can ever compete outside of China is anyone’s guess.

“I never believed C919 would gain much traction outside China,” Hamilton said. “But let’s remember that for every one airplane sold in China, or, more to the point, forced onto the airlines in China by the Government, it’s one less sale for Airbus or Boeing.”

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