Business Essentials for Professionals


Is China's answer to Boeing Ready for take-off?

Is China's answer to Boeing Ready for take-off?
Western journalists were kept away, and only local media were allowed to witness a major turning point in China's aviation ambitions when China unveiled an historic order for its first large commercial jetliner at a national air show in 2010.
Illustrating how Beijing is adjusting to competition for a slice of global jet sales worth $2 trillion over the next 20 years, foreign media and potential buyers will be invited in force when the COMAC C919 jet is expected to stage its maiden flight in the coming weeks.
But China's answer to the Boeing 737 and its state-owned designers face a daunting phase after three years of delays and almost a decade in development. And it is selling the jet abroad in a market dominated by Boeing and Airbus. "They will be trying to compete on price against people who are building aircraft at a much faster pace and with more experience, so there's a risk of getting bled dry," said Richard Aboulafia, aerospace analyst at Virginia-based Teal Group.
Commercial Aircraft Corporation of China (COMAC) rolling out a pilot training program, expanding international staff and has strong, behind-the-scenes backing from Beijing and its plane has Western engines and avionics coupled with a new design.
And both in China's own huge aviation market and, longer-term, overseas, the dominance of Boeing and Airbus could be challenged by COMAC over the coming decades even though the potential are still unproven. The C919 is the first step to this.
Even though the company acknowledges much bigger hurdles abroad, Beijing's backing for the single-aisle plane gives COMAC a springboard in the world's fastest-growing domestic market.
"You can't compare us to Boeing or Airbus, they're in a different strategic stage... We took half a century to solve the first strategic issue (of plane development), it will also take many years to solve the second (market) problem," said Jeff Cheng, a spokesman for COMAC. "After the first flight, we have to focus and research on how to improve the plane's and COMAC's market competitiveness."
A China-based spokesman for Boeing congratulated the company on developing the C919 and Eric Chen, president of Airbus Commercial Aircraft China, welcomed the competition from COMAC.
Mainly Chinese state-backed airlines and leasing companies, the C919 has chalked up 570 firm orders and commitments from 23 customers.
Before it flew last January, the latest version of the Boeing 737 had more than 3,000 firm orders, in comparison.
After decades of trimming costs and honing marketing pitches, those types of numbers from the two big global planemakers is being witnessed. The number of jets flying makes it easier for airlines to raise loans to buy them and the two have global support networks able to respond whenever a jet breaks down just about anywhere.
COMAC has said the C919 will initially be aimed at the domestic market and it has a relatively low-key presence at international air shows while Chinese financiers have muscled into the global aviation arena. But there are signs it's adopting a more outward-facing approach.
The C919's will be in English to support sales, even though the operating manuals for COMAC's smaller ARJ21 regional jet were written in Mandarin.
However, a fraction of those at Boeing and Airbus is the sales and support networks of COMAC - it has at least 50 people in its sales and marketing departments, says Cheng.

Christopher J. Mitchell

Markets | Companies | M&A | Innovation | People | Management | Lifestyle | World | Misc