Ready for take-off? China's answer to Boeing now just needs to sell

Tue Apr 25, 2017 8:16am EDT
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By Brenda Goh and Tim Hepher

SHANGHAI/PARIS (Reuters) - When China unveiled an historic order for its first large commercial jetliner at a national air show in 2010, Western journalists were kept away, and only local media were allowed to witness a major turning point in China's aviation ambitions.

The COMAC C919 jet is expected to stage its maiden flight in the coming weeks, and foreign media and potential buyers will be invited in force - illustrating how Beijing is adjusting to competition for a slice of global jet sales worth $2 trillion over the next 20 years.

But after three years of delays and almost a decade in development, China's answer to the Boeing 737 and its state-owned designers face a daunting phase: selling the jet abroad in a market dominated by Boeing (BA.N: Quote) and Airbus (AIR.PA: Quote). "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) has some cards to play: its plane has Western engines and avionics coupled with a new design; it's rolling out a pilot training program, expanding international staff and has strong, behind-the-scenes backing from Beijing, industry executives say.

And though still unproven, COMAC could be the single biggest threat over the coming decades to the dominance of Boeing and Airbus, both in China's own huge aviation market and, longer-term, overseas. The C919 is the first step to this.

Beijing's backing for the single-aisle plane gives COMAC a springboard in the world's fastest-growing domestic market, even though the company acknowledges much bigger hurdles abroad.

"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."

Eric Chen, president of Airbus Commercial Aircraft China, welcomed the competition from COMAC, and a China-based spokesman for Boeing congratulated the company on developing the C919.   Continued...

FILE PHOTO: The first C919 passenger jet made by the Commercial Aircraft Corp of China (Comac) is pulled out during a news conference at the company's factory in Shanghai, November 2, 2015.  REUTERS/Stringer/File Photo