SINGAPORE (Reuters) - The maiden flight of China's only homegrown commercial jet, the Comac C919, is behind schedule and delivery could be pushed back as much as two years, sources familiar with the program said, dealing a blow to its push to challenge Airbus and Boeing.
The narrow-body aircraft, which will be able to carry 156-168 passengers and aims to compete with the Airbus (AIR.PA) A320 and Boeing (BA.N) 737, was originally scheduled to fly by end-2015 but two sources said it would be delayed to the first half of 2016.
Delivery of the first plane, scheduled for 2018, is also likely to slip, perhaps to as late as 2020, the sources added.
That means the C919 will be later, and a technologically inferior product, than the re-engined and improved variants of the 737 and A320 that will enter service in the next two years.
State-owned Comac, which is leading the design, development and production efforts into the C919, declined to comment.
China has high hopes for the C919 in the lucrative narrow-body market which accounts for more than 50 percent of the aircraft in service.
The final assembly of the first aircraft is taking longer than expected at the production facility in Shanghai, said the sources, who declined to be identified as they were not authorized to speak to the media.
"Comac is proceeding extremely cautiously with the first aircraft. It is deliberately checking everything ... to ensure that there are no safety issues," one source said.
Comac has commitments for 450 C919s, mainly from Chinese airlines and leasing firms backed by Chinese banks and financial institutions. Further delays will make it harder for the plane to make an impact beyond its home market.
China has identified the development of a mature aerospace industry as being key to economic growth, and the C919 and the acquisition of the associated technological know-how is central to that goal.
While Comac executives and Chinese government officials are concerned about the impact of the delays on the image of the C919 and the country, safety is a priority, said sources.
"Any delay is unfortunate, but it is far more important to have an aircraft that is safe and reliable. China is developing the C919 with long-term goals in mind, and it must be patient and careful," said a source close to Comac.
The first aircraft is in its sub-assembly facility, which is next to Shanghai's Pudong International Airport, and it will be rolled to the adjacent final assembly plant once the tail, vertical stabilizer and horizontal stabilizer are fixed.
The two CFM International Leap 1C engines, manufactured by a joint venture between General Electric's (GE.N) aviation unit and France's Snecma, will then be fixed.
Systems from international suppliers such as Honeywell, United Technologies subsidiary Goodrich, Rockwell Collins and Parker Aerospace will be installed in the coming months.
"There is still a lot of work to do. At the pace that Comac is proceeding, they will only complete the systems integration around end-2015," one of the sources said.
The aircraft would then undergo ground tests which could take several more months, pushing the flight test program further out.
Chinese subsidiaries of AVIC, the country's state-owned aerospace conglomerate, are manufacturing the major components of the C919 such as the fuselage, wings and tail in factories around the country. These companies have many years of experience as supppliers to both Airbus and Boeing.
Comac, however, is largely dependent on the global suppliers for many of the aircraft's systems, although this is similar to the approach taken by Airbus and Boeing for their latest aircraft programs such as the A350 and 787.
Many of these suppliers have been asked to form joint ventures with Chinese companies, with Beijing hoping that the country will eventually have the capability to produce these systems and components at home.
That goal, however, is many years if not decades away from being realized, say industry observers.
While Chinese designers and engineers conceived and developed the C919, Comac has hired several former employees of American and European aerospace companies to help with the program.
Comac will be hoping to learn from its much-delayed 100-seat ARJ-21 jet, which received its type certification in December, six years after its first flight and more than 12 years after it was conceived.
The first plane is due to be delivered to launch customer Chengdu Airlines in the coming months.
Certification from the Civil Aviation Administration of China (CAAC) will allow the C919 to enter into service in the domestic market.
Comac, however, could also seek a U.S. FAA certification to improve the aircraft's standing in the international market and appeal to customers outside China.
Airbus forecast in December that China will need over 5,300 new commercial aircraft from 2014 to 2033, or 17 percent of the world's total demand, and it will become the leading country for both domestic and international passenger air traffic.
Editing by Stephen Coates and Jeremy Laurence