Chinese Competitor to Boeing and Airbus

I do not think that the C919 will ever receive an FAA certification. China is a huge manufacture of many many different items that are used throughout the world however they do not specialize in one particular thing. China makes items in mass quantities however it seems they often lack in quality. How can we expect China to make a safe aircraft that could potentially fly many people across the world when it seems as though even the simplest things, such as children’s toys, come with many warnings and dangers. It seems as though emphasis on product quality is not high on the agenda. I am not entirely familiar with COMAC and the quality of products they produce, but going off of what I have seen from products made in China in the past they have already lost my vote.

I don’t see any problems for the US carriers regarding the C919. The fact is that Boeing and Airbus are the more reliable choice when it comes to an aircraft purchase. China already has 500 orders for C919, mostly from state-owned Chinese carriers and domestic aircraft leasing companies (Zacks Equity Research, 2015). As I said before the general public will see an aircraft made in China and it could trigger some red flags, I don’t think that the general public will like this airplane. Obviously the overall cost for the aircraft would have to be lower than the 737 MAX and the A320neo because if it isn’t; COMAC would just be wasting their time. The 737 MAX will nearly be better than the C919 in every way. The only way COMAC could beat out Boeing is by having a very low aircraft cost.

You could say that the relationship between COMAC and the Chinese airlines are good considering what I had mentioned above. Most Chinese carriers have already placed orders for the new C919. Considering the aircraft has yet to receive an FAA certification it makes sense that most of their orders have come from “in-house.” COMAC also has the support of the Chinese government, which will continue to develop the C919 with an almost unlimited amount of funding (Zacks Equity Research, 2015). Plans for the next airplane, the twin-aisle C929, in a joint venture with Russia may be too much too soon. However each step along the way, including sub-types for the C919, will give the Chinese more experience (Leeham Co., 2015).

With COMAC getting all the recognition as potentially becoming a powerhouse and competing with Boeing and Airbus, it’s easy to see how other companies might think that they could do the same thing. Personally, I don’t think that COMAC will be recognized as a threat to Boeing or Airbus for years to come. Boeing and Airbus are both mature companies, which have much experience in aircraft production. They do not need to be worried about such a small company like COMAC. Does COMAC have potential? Yes, but not for many years to come and they will make many mistakes along the way.

Airbus and Boeing responded to COMAC’s C919 by deciding to re-engine their aircraft. 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, but the additional improvements gave the economics back to the A320neo and 737 MAX (Leeham Co., 2015). All in all I think that COMAC will not compete with these giants for many years to come.

References

Leeham Co. (November 4, 2015). No fear of C919 for a generation. Leeham News and Comment. Retrieved from http://leehamnews.com/2015/11/04/no-fear-of-c919-for-a-generation/

Zacks Equity Research. (November 4, 2015). Is the C919 a threat to boeings dominance? Zacks. Retrieved from http://www.zacks.com/stock/news/196801/is-the-comac-c919-a-threat-to-boeings-ba-dominance