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Can the COMAC C919 Alter the Aircraft Market Dynamics Significantly?

Can the COMAC C919 Alter the Aircraft Market Dynamics Significantly?

The Chinese home-made single-aisle aircraft, the COMAC C919 has successfully completed its maiden flight on May 5, 2017. According to different reports, the C919 is set out to compete against the re-engined Airbus A320neo and Boeing 737 MAX. And one should add the Bombardier CSeries to that list. Yet, officially COMAC was a technical partner of the Canadian airframer for its all-new CSeries. Therefore, this existing cooperation may, in theory, spare the Montreal-based original equipment manufacturer (OEM). Practically speaking, however, it is hard to imagine how Chinese airlines would let down their home-made airplane in favor of foreign interests. This reasoning applies to Airbus and Boeing as well, despite the fact that both Western OEMs have set up plants in China and thus do manufacture some of their airplanes there.

Latest reports suggest that COMAC has received orders totaling 566 C919 airplanes of which 99 are firm orders, including 10 aircraft for GE Capital Aviation Services (GECAS). Orders placed by Chinese business entities, including airlines, banks, and leasing companies represent 98% of the total.

So will the C919 alter the aircraft market dynamics? The answer is affirmative. Yet, to what extent? One might ask. Can COMAC dominate the Chinese single-aisle market? Probably in the decades to come. Some critical conditions need to be met in terms of reliability, safety, and aftermarket support.

As the Chinese home-made aircraft proved to be as reliable and as safe as western-designed aircraft, chances are the C919 will capture a significant chunk of the Chinese domestic market. Providing support to local airline clients should not be much of an issue.

When it comes to international markets, however even if the C919 prove to be very reliable and safe, some key challenges to meet would be the timely certification by foreign regulatory bodies such as the FAA and EASA, in addition to aftermarket support. As such, COMAC may win international orders with varying degrees of difficulty. This will depend on whether existing commercial ties between China and other foreign countries can help in setting up a robust network of in-service support in a timely manner.

The Western market, however, may prove to be much more difficult until the Chinese OEM is in a position to set up an adequate support network in Europe and the Americas.

Hopefully, the experience gained at conquering their domestic and regional markets first could help significantly to expand progressively into Western markets. Considering the fast growth of the demand for air travel in China along with heavy investments in aviation infrastructure, it may well be that COMAC would not need the international orders before altering the dynamics of the aircraft market significantly.

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Kofi Sonokpon

Kofi Sonokpon

Managing Editor of Airline Profits, the first aviation magazine devoted to improving airline effectiveness and profitability, Kofi Sonokpon has more than 20 years of international experience in aviation. Kofi holds an IATA sponsored Master of Business Administration (MBA) in Air Transport Management from the John Molson School of Business at Concordia University in Montreal. Kofi Sonokpon is a speaker, an airline business thought-leader, and author an innovative book series intended for the 21st century airline, namely Airlines for Business and Airlines for Technology.