No fear of C919 for a generation

Nov. 4, 2015, © Leeham Co. The first COMAC C919 was rolled out of the factory over the weekend, China’s mainline entry into the fiercely competitive arena now “owned” by the Airbus-Boeing duopoly.

COMAC C919. Click on image to enlarge. Photo via Google images.

Although the two giants each has said China is the next competitor they will have to face, the Big Two have nothing to worry about for a generation to come.

Here’s why.

  • When COMAC first announced plans for the C919, it was going to be the first mainline jet in the A320/737-800 category with a new engine, the CFM LEAP 1C. Neither Airbus nor Boeing had yet decided whether to re-engine their airplanes, and in fact Boeing was publicly dismissing the idea altogether.
  • The proposed entry-into-service was announced for 2016, an ambitious (and unrealistic) schedule considering COMAC’s inexperience at designing and building airplanes, and the horror story of delays, design and production problems of the COMAC-AVIC ARJ21 regional jet.
  • While the C919 would have had an economic advantage over the A320 and 737-800, the decision by Airbus and Boeing to re-engine their airplanes not only erased the advantage, the additional improvements gave the economics back to the A320neo and 737 MAX.
  • The C919 will still have lower capital costs, but the Chinese have little experience at a global product support system for its military or commercial aircraft. Competing with Airbus and Boeing on this scale is, well, no competition at all.
  • Delays for the C919 will probably mean EIS won’t happen until 2020 (COMAC currently targets 2018), but which time the A320neo will have been in service nearly five years and the 737-8 about three years. PIPs will already be forthcoming, further improving economics.
  • Perhaps most significantly, by 2020, Airbus and Boeing will be producing their airplanes at the rate of 60 per month. Even if the C919 enters service by 2018, by 2020 production is unlikely to be more than 5/mo, or 60 per year. This is hardly a threat. If EIS slips to 2020, hitting 5/mo will at best probably be 2023, by which time Airbus and Boeing will be well on their way toward clean-sheet successor airplanes to the A320 and 737.

ARJ21. Click on image to enlarge. Photo via Google images.

The ARJ21, China’s first serious attempt at a commercial jetliner, was a learning process. From this, COMAC learned much to apply to the C919, but this is still a learning process. Plans for the next airplane, the twin-aisle C929, in a joint venture with Russia (which has long experience in building airplanes but powered by less-than-stellar engines) may be too much too soon. But each step along the way, including sub-types for the C919, will give the Chinese more experience.

Developing a commercial aerospace industry is a national goal of the Chinese. They’ve developed a space program and a blue water Navy. Anyone who thinks that the Chinese won’t develop a viable commercial aviation industry is sniffing kerosene. But it will take time.

The first Airbus airplane, the A300B2, entered service in 1974. The A320 followed in 1988. By 2000, 26 years after the A300, Airbus captured 50% of the market.

The culture is a patient one. The leaders waited 99 years to reclaim Hong Kong and Macau. Waiting 26 years—a generation—is a piece of cake.



38 Comments on “No fear of C919 for a generation

  1. It’s going to be an extremely expensive project, the cost of which will fall on China’s already massively bankrupt banks.

    The planes will probably be more expensive to produce than their Airbus and Boeing equivalents while having poor residual values. Chinese airlines, which are commercial operations these days, can’t afford to own the C919, beyond the token number they are forced to take, to say they are “customers”

    The C919 will instead be “bought” by “leasing companies”, but these aren’t commercial operations. They are fronts for banks, which in China are money pits for pet projects of local and central governments, with scary levels of bad debt. These “leasing companies” will no doubt lease the planes at a severe discount to airlines, so the C919 will be built and used in numbers.

    If banks already have trillions of yuan of bad debt, what’s the problem with taking a few hundred billion additional dollars of non-performing aircraft assets onto their balance sheets? That’s the scale of the commitment.

    • Back in Jul 6 2013 Stanley Chao writing in AW had this to say about the C919

      ” My skepticism comes from Comac’s methods in designing and building the C919 . First, it is using engineers, mid-level managers and executives who have virtually no commercial aircraft experience. Second, it is outsourcing almost everything: parts, systems, subsystems and testing.”
      “What is more disturbing is that Comac engineers and managers are not interested in understanding the engineering issues and problems. Rather, they only want the answers. Because of pressure from the top, they will outsource the answers and solutions from Western companies and simply implement them without understanding the “whys.”

      This may be a way of explaining why highly capable workforce has struggle d with civil aircraft design and manufacture for nearly a generation. And its an antidote to those who say China is ‘patient’, when the reality is that are in big hurry.

  2. I don’t expect this plane to be internationally competitive, but I figure it will be certified and competitive within China. Right now, it is safe to assume that Comac has neither the experience or knowledge base needed to get a plane through the American or European Certification process – just ask Honda how fast that Hondajet they’ve got has been certified!

    Nevertheless, if they can sell about a 1000 within China – and maybe Vietnam and Russia – then they will have had a good run and a gained some valuable learning experience. Along the way, maybe they can build and certify an a330 or 777 successor for internal consumption. Then, after about 20 years have passed, they’ll be ready to compete internationally.

    Sometimes is easy to forget that China – by itself – is a mighty big and powerful market for things, even home-built aircraft. And I think that market still has a lot to grow. In fact, within 15 years, I expect China’s economy to equal that of North America and Europe combined. As a result, I think Comac already has a market for its aircraft.

      • I was going to say the same thing. HSR along the eastern half of the country reaches something like 70 percent of the population. By the time Chinese airplanes are flying, they will be forced into a niche market for cross-continental flights, and will be uncompetitive with the A and B teams. I don’t see them being competitive in the next 30 years. But the author is right: they are serious and won’t mind sinking many billions into this before a profit is turned, all because of prestige and saving face. Remember: they are extremely ethnocentric if not racist, honestly believe they are genetically superior to everyone else, and see the embarrassment of the last 200 years as a cycle in their 5000 years of history. They want revenge.

        • “ethnocentric”, “believe they are genetically superior to everyone else”…, you are talking about Caucasian?

    • Jimmy:

      The AJR21 was built to meet international standards, one of its issue was China choose to lead with that aircraft and when it went South they still had to finish it as it was/is the lead into the C919

      So the C919 will be certified to US, Europe and Japan standards, theoretically able to sell anywhere.

    • There is no such thing as “an a330 or 777 successor for internal consumption”. These aircraft by definition are for long haul and if they aren’t certified in Europe or the US they cannot land there, as well as in many other countries that follow those regulations.

  3. The stewardship of Hong Kong was enshrined firstly in the Nanking Treaty & the later Treaty of Peking in 1898 which handed Hong Kong & what became known as the New Territories to Great Britain on a ninety nine year lease.

    As with Macau a raft of Chinese leaders of various political persuasions identified the benefits the British Hong Kong lease brought them & China is today better for their lack of interference.

    There was no reclaim only a handover, which was conducted in a typically British manner.

    Having spent two years on the tarmac at Kai Tak in the sixties I can vouch for the interminable patience of the people & their culture.

    • Hong Kong Island and Kowloon were actually ceded to Britain in perpetuity, the New Territories were leased later on for 99 years. There was indeed a negotiated handover; China did not send in the baliffs!

      Knowing that the lease was coming up in 1997 the Thatcher government opened negotiations in the 1980s. It would seem that the Chinese government of the time had no inkling that the UK was actually willing to stick to the lease terms, seemingly assuming that the UK had no intention of handing back the New Territories. Apparently the approach by the UK took them somewhat by surprise. It’s easy to forget that China back in the 1980s was more inward looking and insular than it is today.

      The UK knew that handing back the New Territories alone would make Hong Kong and Kowloon non-vaiable. Most people live in the New Territories. Voluntarily handing back the whole lot and in return securing a 50 year deal as a special administrative zone was probably the best that could be achieved. It’s worked out quite well so far.

  4. The $64 question here is if China keep building aircraft to old standards, then they will never catch up.

    The only reason Airbus caught up with Boeing was they were top heavy, egotistical and very self satisfied with themselves.

    the only reason China would get a foot in the door is if both A and B dropped the ball and I don’t think so (B if they just decide they aren’t going to be an airplane company which at times they have verged on)

    If China can force the airlines inside China to each take so many such that no one suffers a competitive disadvantage , it can sell in China (forced down their throats)

    It may even sell in a few third world countries on discounts. Viable though, no. As soon as it goes up against and A or B equipped competitor they loose (both economically and support wise which translates into economics) .

    So when does China get the chops to hit the big times and come out with a new aircraft again? Twin aisle is even harder than single.

    By the time they get it going they are at least one generation behind and never have gotten into the game.

    Its not like computers where you have very short design build cycles that you can make mistakes, figure them out, repeat until it sells.

    With product of life spans of 20 years or more, it isn’t going to happen.

    And as noted, China shot itself in the foot with high speed rail, per populous there will not be nearly the single aisle markets as the same comparable levels for the rest of the world.

    They may well develop segments of an aviation induct but it won’t be entire aircraft.

    • “And as noted, China shot itself in the foot with high speed rail, per populous there will not be nearly the single aisle markets as the same comparable levels for the rest of the world. ”

      Rest of the world here is mostly US, isn’t it?

      It’s not China’s task to provide a big NB market.
      China’s ( government ) task is to provide for their population.
      Here: efficient transit. In densely populated regions probably better served by (regular, HSR) rail.

      • Ewe:

        You missed the intent of this so will spell it out.

        China is a unified market, it has a government that ensures that. Airlines can’t buy aircraft without state say so.

        It is the ideal setup for high speed rail (very large populations in a relatively small area). The US analogy would be East Coast (mostly N.E.) West coast with LA, San Diego and SFA/Oakland complex.

        Europe has developed a very good rail system unlike those areas of the US.

        However, Europe is surrounded by destinations that you can’t build a high speed rail to (Africa) not worth it (Turkey) , Near Middle East, Britain with its single connection, Scandinavia Countries, Eastern Europe, Russia etc.

        US has a wide spread market with similar outside the country routes that are well served by single aisles (though the passengers may not be)

        India has none, African has none, Australia is pretty spread out, South American has none.

        So if it was all planned, China interest would be to have not done high speed rail and gone for single aisle jets in some hope that if they did enough they might get it right. That way they had a guaranteed internal consumption as hoping to compete with A and B is incredibly lay difficult.

        As was noted not only are the current A and B single aisle a jump, PIPs will come along and they will get better. C919 has not flown, low rate production that will never see high rate and PIPs don’t work in that situation (they don’t pay).

        As for the Statement China government task is to provide for the people leaves me laughing. All politician task it to provide for themselves and hopefully in that regard there are crumbs left for the rest of the masses.
        Building artificial islands in the middle of ocean far from your shorelines is certainly not the interests of providing for the people.

        And the reason Airbus succeeded was US foolishness (hubris), I don’t see that happening again with Airbus and Boeing. It also was in the right era of incremental tech advances which is no longer true (the advances are much bigger now)

        • “Ewe.”

          You’re so refined and suave with your arguments.

          .. but it is all out of proportion and seems to miss the primary points.

          You don’t turn your infrastructure planning upside down
          just for selling a bunch of planes. ( US did this in a way by having their public infrastructure underfunded and undermaintained but it is a rather certain thing that China will not )

          china is invested in expanding their railnetwork in China and across their borders. Air transport probably will not go majorly beyond demand for very fast transit and connecting remote places.

          • Ewe:

            Thank you, of all the things that have been said about me suave is not one of them!

            China is putting huge bucks into the aircraft program, if not for internal consumption to kick start it they would have none.

            As I recall AV Week commented on the disconnect between b u9lding high speed rails, big airports.

            Likely two empire building operations going on at the same time.

            Not that that sort of thing happens in the West of course.

  5. The Universities and Grandes Écoles of Toulouse (whereof Sup’Aéro, ENAC, IUT de Rangueil, ENSEEIHT, ENSICA …) are counting ever more Chinese students who are successful in the competitions to enter these programmes, Consequently, China is getting an influx of highly qualified Engineers, some of them after post-school professional training in French high-tech Entities, based on personal merits. In short, Western know-how is openly accessible to China and China has an intense student dissemination and financing policy running, tuned to harvesting any available Western Manna of knowledge. I am led to believe things are identical in Germany, UK, USA, Russia, … No wonder China are catching up !?

    • It has been going on for at least 25 years. Fellow Chinese students, most doing Electro lived with 6 in 4 person apartments, shared books, worked like hell, never joined sports / social events, did their study without any delays and moved back.

      They were/felt privileged to be selected to study at the western best universities. I think they were the brightest, handpicked from hundreds of Chinese universities..

    • West know how is freely available on the internet (or at least though it)

      • “Western know how freely available on internet”
        Well if you are copying everything, that will only get you 20% of the way.

        • I am talking about penetrating to the core secrets of an organization, you get the recipees, research etc and you have the fundamental of understanding the product and processes.

          It doesn’t work for commercial aircraft programs, it does help military in some advances and counters and it works for a lot of other items.

          Reverse engineering does not get you the core secrets, espionage can.

  6. Intersting take that reminds me of Japanese cars/manufacturers.
    It took westerners quite some time to realise they are not the only ones with brains. The same is happening now with Aircraft design and production in China. Sure it will take time, but once there and proven viable , China will a dominant if not the dominant aircraft manufacturer on this globe.

    • The Big difference is Japan build cars and tanks even pre WW2 and as long did the European companies which formed Airbus produce aircraft. May I mention the Concorde? That is not the case for China but they will learn it.

      • Also you probably don’t remember but the first Japanese cares were not well done, short design build cycle and learning allowed them to gain ground fast..

        Aircraft do not have short design build cycles.

        As per Boeing and MD, the US automakers also ignored the completion at the time thinking it was low hanging fruit not worth competing in, that is not going to happen again.

        73 oil debacle paid a part in that as well, advantage Japanese as they did not have big gas hogs. You can’t count on that and the 919 is worse fuel user than current offerings (not to mention not in service)

        • “Aircraft do not have short design build cycles.”

          That may be true for Boeing or Airbus but not for China.

          The A330CEO also has a worse fuel burn rate than the 787 but is much cheaper, available and a mature product. The Comac 919 for sure has to be cheap.

          • Really, China does not have long design build for Commercial Aircraft?

            ARJ21 and the C919 while supposed to be certified to western standard have not been.

            And its taken forever to get them this far. Not happening.

  7. IMHO, the Chinese inroads into the lucrative narrow-body sector dominated by the Airbus-Boeing duopoly should be very very worrisome to the West. For a variety of reasons!

    1. Mindless transfer of precious technology, slowly but surely, to satisfy our capitalist greed for markets and short term profits cannot be good in the long run. Just recall how it has devastated jobs in the West, and US in particular, over the last two decades. It will be a repeat of the same. Deja Vu all over again.

    2. Complacency did not do Boeing any good. Now they have a real almost “existential” threat from Airbus, which makes even small mistakes highly consequential. Do I have to remind anybody about the B787 moonshot and the B747-8 fiasco?

    3. The point that is lost in these discussions is NOT that they are going to produce a superior product that will replace western ones. They won’t if we keep innovating. But … they will produce a product that is GOOD ENOUGH for developing markets, including their own domestic market. This point is important to emphasize. What that does is essentially remove those markets from the reach of Boeing and Airbus (eventually if not today). That can have a devastating consequence. Just remove all those orders from developing countries including China and other Asian countries from the current backlog of huge orders for the re-engined Boeing and Airbus aircraft and see what it does to them. Will they still be singing “Happy days are here again?”

    4. C919 is cleverly done with crucial western technology, not for competing with the west but to satisfy domestic demand. Even if it does not get western certification, it is a force to reckon with. All C919 needs to do is displace Boeing/Airbus single-aisles just in the domestic market. Imagine the duopoly not being able to sell to that market.

    5. The Russian-Chinese joint project to produce a competing wide body will draw upon the technology and valuable know-how Chinese have gathered while making C919. If that is successful, goodbye to the wide-body cash cows from the duopoly.

    6. IMHO, the day they debuted C919 should be marked on every one’s calendars. Ten years from now, not even twenty, we will look back at the date and wonder how we missed its significance.

    • 1. Mindless transfer of precious technology, slowly but surely, to satisfy our capitalist greed for markets and short term profits cannot be good in the long run. Just recall how it has devastated jobs in the West, and US in particular, over the last two decades. It will be a repeat of the same. Deja Vu all over again.

      Knowledge and know how is definitely not a limited resource.
      ( Though you find that concept quite often in US movie productions. This single item of a special product that cannot be reproduced and back and forth around it. Lots of funy ideas over IP go in the same direction )
      Europe transfered a lot of information to the US ( in various ways ) but they still have the capability to generate more and better.

      What the US dropped was capabilities to generate more ( knowledge, know how ).

      It is definitely not the sharing aspect that is detrimental.

      • Transferring know-how is compounded by not investing in innovation! No one has monopoly on brain power, but inventing and perfecting exacting technologies is a tedious, time consuming process. If you let some one else leapfrog a few steps, you should not be surprised to find yourself competing with that person!

        Chinese are adept at reverse engineering. Recall what happened to the Russians with their Sukhoi fighter technology. They found themselves competing with knockoffs of their own fighter!

  8. I believe that has been proven incorrect. Its a license built aircraft contrary to rumors.

    I don’t think they have exported any.

    Maybe not smart on the Russians part as they took the airframe and have developed their own versions of it. Whether that is licensed or not is unknown.

    • I feel your hurt.

      But it is a take both or none situation.

      Cheap research labor at home and skimming off
      some of the best students for home use
      vast amounts of research results
      most students going back home and taking
      what they learned with them.

      Just look at statistics on scientific publication authorship _in the US_ differentiated over author nationality.

      US born students might even be a minority?
      People wise the US has always been more of a collector than a creator in knowledge.

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