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By Scott Hamilton

May 27, 2024, © Leeham News: A flurry of orders by China’s Big Three airlines finally began to balance announced deals for the COMAC C-919 mainline jet.

Until the recent orders from Air China, China Eastern, and China Southern, the vast number of the announced transactions were concentrated among Chinese lessors. The imbalance was not a good thing.

Airbus and Boeing prefer speculative orders by lessors amounting to 25% to perhaps 35% of the order book. (Lessors in recent decades often accounted for 40% to 50% of the in-service fleet, but the differences were from sale/leasebacks of orders originally placed by airlines.)

Boeing and Airbus have different views toward lessors. Airbus, especially under then-Chief Commercial Officer John Leahy, viewed lessors as an extension of the Airbus marketing arm. Lessors broadened Airbus’ market penetration, especially during the early years of the A320’s entry into service.

On the other hand, Boeing viewed lessors as a necessary evil, preferring to deal with a select few rather than a large number. Both viewed lessors to some degree as competitors to direct sales.

Before the Big Three orders, COMAC’s tally was around 760+ for the C919. More than 70% of the announced orders were for Chinese lessors. No lessor outside China was a customer and only Indonesia’s Trans Nusa (partly owned by Chinese lessor CALC) was a customer outside China.

Following the Big Three orders, about 46% of the orders are from airlines—a much better mix than before but still overweighted with lessors.

With Airbus’ A320 family sold out into the 2030 decade and Boeing’s MAX production and delivery schedules in disarray, what alternatives do customers have to the Big Two OEMs? COMAC is the most likely, but the challenges are immense.

COMAC’s challenges

COMAC has big challenges ahead if it wants to become a major global player in commercial aviation.

• Gaining credibility for the C919 inside and outside China.
• Economic competitiveness to the A320neo and 737 MAX.
• Ramping up production.
• Global product support.
• Geopolitical concerns.