Chinese jet takes on Big 2
Updated: 2010-12-01 15:15
By Wang Zhuoqiong (China Daily)
The C919 prototype is unveiled at the China International Aviation and Aerospace Exhibition at Zhuhai, Guangdong province. [Photo/China Daily]
First large commercial plane set to ride on demand for aircraft as economy grows
The two-horse race dominating the global aviation industry is now looking at a troika rush for the skies.
The unveiling of China's first large commercial airliner, the C919 prototype, this week opened the gates to a potentially fierce race between Commercial Aircraft Corp of China (COMAC) and the giants of the aviation industry, Boeing and Airbus.
The goal of China's industrial planners for decades, the C919 goes head-to-head with the popular Boeing 737 and Airbus A320. It will be a major competitor in the global aviation market, particularly in the domestic sector where the two aircraft manufacturing behemoths currently dominate.
"China is going to build the third leg of the aerospace industry after North America and Europe," says Shane Tedjarati, president and CEO, Honeywell China and India.
COMAC, which on Tuesday announced that four major carriers in China had placed orders for 100 planes, expects to start building next year. A maiden flight will follow in 2014 with the first delivery by 2016. The prototype has 160 seats.
Tedjarati says that the entry of the Chinese aircraft into the global market could send quick shockwaves throughout the industry.
"China is the only other continental economy with a national will, the muscle and the capacity and all the other ingredients that are needed to create what happened in Europe and the United States 30 years ago," he says. "People are still buying Boeing and Airbus" but this development, he adds, is good news for the market.
The birth of the nation's first large commercial aircraft comes at a time of growth in the aviation industry with domestic airlines set to place more orders. COMAC and the Aviation Industry Corp of China (AVIC) both forecast rising demand for aircraft as China's economy continues to grow.
According to Boeing's forecasts, China will need 4,330 new aircraft over the next 20 years with the fleet expanding to three times its current size to become the largest market outside the US. COMAC also issued its forecast for the next two decades and predicted a market with 4,439 civil aircraft with a value estimated at more than $450 billion (331 billion euros).
So far, Boeing says it welcomes competition as a catalyst for innovation.
"The C919 is a good thing and there is room for competition," says James Simon, vice-president of Boeing China commercial-airplane sales. "It makes all of us do our job better and build more efficient aircraft."
COMAC announced that it had 100 pre-orders during the biennual China International Aviation and Aerospace Exhibition at Zhuhai. According to the manufacturer, Air China, China Eastern, China Southern, Hainan Airlines and General Electric Capital Aviation Services of the United States, an airplane leasing company, made the orders. The orders are seen as a vote of confidence in China's quest to make large passenger jets.
The pending purchases from the big three State-owned carriers will dampen prospects for overseas suppliers in a market Boeing expects to be worth $480 billion through 2029. Airbus earlier this month announced an order from China for 102 planes, including 50 A320s. Air China, China Southern Airlines and China Eastern Airlines, the nation's biggest carriers, all placed orders. Boeing won many 737 orders this year from Air China, Okay Airways and Xiamen Airlines.
The plane's designer, Wu Guanghui, says that the company is expecting more than 2,000 orders from domestic and international buyers.
But Zhang Hongying, a top official at China's General Administration of Civil Aviation, says the Chinese aircraft industry is still in a weak position in terms of scale and numbers.
Of 1,636 registered civil aircraft, only 18 are homegrown, he says. Zhang says the government is encouraging leasing and purchasing China-made aircraft by mapping out favorable policies. Analysts say China will have to work hard to woo foreign airlines.
"In the US, Boeing takes the lead. In France, it is the Airbus. I hope one day the C919 can dominate our home market," says Liao Quanwang, executive vice-president of the development research center at AVIC.
There could also be a fourth horse in the race for control of the aviation industry. COMAC's regional aircraft, the ARJ21-700, of which China owns the intellectual property rights, also took to the skies at the Zhuhai air show. Upon certification from regulators, the C919 will be delivered to buyers in 2016, while the ARJ21-700 is scheduled to be approved in the fourth quarter of next year, the company says.
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