Saturday, October 29, 2016

Comac - Player 3 Joins the Game...?


(Comac C919 "B-001A" displayed at Pudong International Airport in Shanghai - Photo courtesy: www.airliners.net)


     In 2008, Comac (Commercial Aircraft Corporation of China) announced its plans for the first in-house China built aircraft to compete in some of the same markets as Boeing and Airbus. Comac initially stated that with their new design, they would be ready for the first flight by 2014, and ready to deliver the first units to customers in 2016. Unfortunately, as with most large scale projects (especially in the aviation industry), they were soon met with delays (Fortune). Now, it appears as if Comac will be lucky to get the C919 in the air for the first time by the end of this year. Deliveries to customers aren't expected to happen until almost 2020 (Fortune).

     Personally, I do believe that the C919 will receive the FAA certification it needs to operate over American soil, but I do not see it happening for several more years, and I also don't see it happening on the current variation of the C919. It is rarely the first version of any product that takes off (you can take the pun or you can leave it...), and I don't expect the case to be any different here. I don't think the C919 will get the FAA certifications until at least a second or third generation version is released, probably another decade or so away.

     Assuming Comac is granted the FAA certifications for the C919, and it is approved to operate at American airports, I see a wonderful tidal wave of capitalistic competition coming. I expect that there may be some apprehension from American purchasers at first, but hopefully the FAA certification is proof enough that the C919 is a capable enough aircraft. I would expect to see Comac enter the American market with a price tag on their aircraft that is aggressively low. This should appeal to some of the smaller airlines (Spirit, Southwest, other foreign airlines that utilize airports in America), and hopefully Comac proves themselves in this market. The (hopefully) lower price tag of the 'new kid in town' still trying to prove themselves should help get their foot in the door and establish them as a viable competitor for the big aircraft manufacturers. As for public appeal, other than some potentially badly spun news articles about "Chinese aircraft invading American skies", I doubt that 95% of the general public will even know they are boarding a Chinese made aircraft.

     Comac, an acronym for "Commercial Aircraft Corporation of China" is a Chinese government owned entity with the sole purpose of producing Chinese made airplanes to compete with other manufacturers, namely Airbus and Boeing (CNBC). Although Comac is touting the C919 as its main workhorse, even though it hasn't yet gotten off the ground, they do have one other aircraft in production that has already seen flight. The ARJ21-700 made its first service flight on June 28th of this year. It carried 70 passengers from Chengdu to Shanghai, roughly a 2 hour flight (USAT).

     I fully believe that Comac is paving the way for new competitors. Should the C919 obtain FAA certification, I fully believe that at least a few other startups may join the game and try to take a slice out of the aircraft manufacturing pie. Already, there is a Russian company that has launched a new program to release a 737 competitor by 2020. Irkut, a subsidiary of the Russian government owned United Aircraft Corporation, announced this past June that they had a design (The MC-21) that would compete with the Boeing 737 and actually feature a slightly wider interior cabin. The MC-21 still needs to be taken on its first test flights, but Irkut expects to be able to make deliveries to customers by 2020 (CNBC).

     Boeing and Airbus, thus far, haven't had to react too aggressively. Both are aware of the potential new competitors, and both have offered up some numbers on how many aircraft they expect there will be a demand for in the next 20-30 years. They expect that roughly 70% of those aircraft will be single-aisle aircraft (CNBC), where the C919, A320, and 737 will all compete. Other than releasing newer and updated versions of each of their current models (most likely would have happened without the appearance of Comac anyways), there hasn't been too much of a reaction from either company. Although both remain well aware of the potential new competitors as time pushes on. I would personally love to see a few more companies come into play. Competition lowers prices after all, and that is always good for everyone.



References:
Fortune - Cendrowski, S. (2016, February 16). China’s Answer To Boeing Loses Shine. Retrieved October 27, 2016, from http://fortune.com/2016/02/16/china-comac-c919-delay-delivery/

CNBC - Kharpal, A. (2016, July 13). Russia’s Irkut and China’s Comac are Taking on Boeing and Airbus in This $3 Trillion Area. Retrieved October 27, 2016, from http://www.cnbc.com/2016/07/13/russia-irkut-and-china-comac-are-taking-on-boeing-and-airbus-in-this-3-trillion-area.html

USAT - Mutzabaugh, B. (2016, June 30). Now Flying: China's First Modern Passenger Jet Enters Service. Retrieved October 28, 2016, from http://www.usatoday.com/story/travel/flights/todayinthesky/2016/06/30/now-flying-chinas-first-modern-passenger-jet-enters-service/86549178/

Photo source: http://www.airliners.net/photo/COMAC-Commercial-Aircraft-Corporation-Of-China/COMAC-C919/2726413

2 comments:

  1. I was unaware until reading your post that Russia has a similar start up company trying to produce single isle jets to compete with Boeing and Airbus. I think the only companies that will be able to eventually compete will be ones that are funded by large countries governments such as China and Russia. I really don't think private sector companies will be able to compete. They don't have unlimited resources and funding and that's what it takes to start one of these massive airliner production businesses.

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  2. I agree that competition lowers prices, but Im not sure thats the best things in this sort of scenario. If manufactures are forced to lower their prices to compete in the market, that will certainly lead to a loss in some other department. Being either lower wages for workers, leading to less quality work, or decreased engineering budget, leading to lower quality designs.

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