The Commercial Aircraft Corporation of China, or Comac, delivered its first C919 on Dec. 9, following more than a decade of development. The plane, now in the fleet of Shanghai-based China Eastern Airlines, will enter revenue service early next year.
China Eastern’s C919 will seat 164 passengers, a big increase from Comac’s smaller ARJ21, which China Eastern also flies. That plane seats just 88 passengers. The C919 is a more ambitious product, aiming to ultimately compete with the Boeing 737 and the Airbus A320, the industry’s two most widely sold jets. According to Cirium’s Fleets Analyzer, Comac currently has orders for 602 C919s, the majority from China-based leasing companies. No airline from outside of China has yet to place a direct order to buy the plane.
Comac, owned by China’s national government, is on the forefront of Beijing’s efforts to create a world-class aerospace industry. That would reduce the country’s heavy dependence on Airbus, Boeing, and other western manufacturers. The C919 itself, however, is for now powered by western-built engines, specifically the Leap-1C built by CFM, a joint venture between America’s GE Aerospace and France’s Safran. Honeywell, based in the U.S., is another key C919 supplier. Escalating trade and national security tensions have led the U.S. and other western countries to rethink their willingness to supply advanced aerospace technology to China, threatening to delay the C919’s development. Comac has largely dismissed the impact of export controls so far. In the meantime, another state-owned Chinese company is now attempting to produce engines for the C919.
The new plane, to be sure, is less technologically advanced than the latest MAX and NEO variants of the 737 and A320, respectively. Those planes, furthermore, are part of aircraft families featuring versions of different sizes—that’s an important selling point to many airlines. Boeing and Airbus also have a global network of service and support facilities built up over decades, ensuring any maintenance issues can be addressed wherever in the world one of their planes might be. It will take many years before Comac can offer a similar range of differently sized variants for its C919, and a comparable worldwide scope of service. To succeed commercially without an overreliance on government subsidies, the manufacturer must also become more proficient producing and assembling at scale to lower costs. If it does hope to eventually sell the C919 overseas, it will need to obtain airworthiness certification from regulators in different countries.
Early in the C919’s development, Europe’s Ryanair expressed interest in the plane, even signing a loose agreement with Comac to help with fostering the plane’s ultimate design. But the move was viewed by many at the time as a mere negotiating tactic to secure better prices from Boeing, to whom Ryanair is a vital customer. Unlikely for now to win any major orders from outside China and perhaps its close allies, the C919 appears poised to fly mostly with Chinese airlines in the near term. China’s market is large though, ranking second in the world by seat capacity behind the U.S. But even dominating the captive Chinese domestic market is a long way off. In July, China’s three largest airlines—Air China, China Eastern, and China Southern—jointly placed orders with Airbus for 292 A320s.
In the meantime, China’s unique approach to managing the Covid pandemic has left its airline sector with heavy losses. During this year’s third quarter, a peak travel period in normal times, China’s Big Three airlines combined for nearly $4 billion in net losses, after losing nearly $7 billion the quarter before. In 2019, they earned a collective third quarter profit of $1.4 billion.
The stakes are high not just for China’s economy but also for many important aerospace players in the U.S. and European economies. While Airbus and Boeing are hardly eager to see a new competitor, suppliers like CFM and Honeywell are generating billions in revenue from their contracts with Comac. Even Massachusetts-based Raytheon, whose Pratt & Whitney unit does not supply engines for the C919, nevertheless hopes to win more business from Comac in the future. “The Chinese commercial aerospace market is the fastest-growing in the world,” said Raytheon’s CEO Greg Hayes at an investor day event last year. “We have to play there. We have thousands of employees. They are key parts of our commercial supply chain. And so, we’re going to continue to engage with Comac.”
In July of this year, Hayes reiterated his emphasis on China’s importance. “Obviously, the Chinese have a desire to have indigenous aircraft. That’s the C919, maybe the C929 at some point. But the fact is… we will continue to work with our partners there.” The C929 is a widebody plane in early stages of development at Comac, this time working not primarily with western suppliers but rather Russia’s United Aircraft Corporation.