The C919, China’s first indigenous narrow-body jet, embodies Beijing’s progress in pursuing technological self-sufficiency and holds the potential to reshape the global aviation market, but it faces a host of difficulties in challenging established giants Boeing and Airbus, according to the Hong Kong-based South China Morning Post (SCMP)

During a June 26th panel discussion, Jason Li Hanming, a US-based aviation analyst, along with SCMP reporters Frank Chen, William Zheng, and moderator Ralph Jennings, discussed questions surrounding the home-grown Chinese passenger jet as the US global trade war adds to its challenges.

In his introduction, SCMP’s Ralph Jennings, an economic news correspondent, said:

“Airbus and Boeing have long dominated the market for large passenger aircraft, including in China. Both of these huge, Western manufacturers bank on China needing around 9,000 planes over the next two decades for passenger demand. Here's where it gets interesting. China started an effort two years ago to supply its own large planes with the maiden flight of its first homegrown single aisle jet, the C919.

Now, the state-run manufacturer Commercial Aviation Corporation of China (COMAC) … is working on hundreds of orders for the nation's three biggest airlines. However, the C919 still depends heavily on key foreign-made parts, and no aviation regulator outside of China has given the jet permission to use its airspace. Just 18 planes are flying inside China. Our three experts will explain whether it's a smooth flight ahead.”

C919 Development

SCMP’s Frank Chen explained: “The C919 is more of a gradual iteration of existing models based on a very mature time-tested design already used by Western plane makers. So, it is not any kind of drastic redesign of a narrow-body aircraft type. It's based on a mature design incorporating all the systems equipment also found on an Airbus A320 or Boeing 737 … supplied by mainstream Western suppliers’ aviation companies. So, I think this is a logical, realistic decision made by COMAC to shorten R&D time to save money. “

Chen also admitted that the C919 is very dependent on the United States and other Western suppliers for key components, including its jet engines produced by General Electric: “Well, I think COMAC certainly hopes it can continue to buy those key components from… Western suppliers… Realistically, I don't think that COMAC … will … think about replacing these Western components for homegrown ones (soon)… Jason has just mentioned that these Chinese components, these Chinese alternatives, are yet to come to parity with Western products in terms of fuel efficiency… In terms of reliability … appears that there could be some manufacturing bottlenecks. So, for the sake of getting Western certification … I think it is a more realistic and (a) wiser choice for COMAC to continue to use critical Western components, including engines …”

However, this reliance on Western suppliers is seen by some Chinese officials “as a vulnerability.”

Jason Li noted that China does have plans to replace the General Electric engine with a Chinese-built engine: “Just take the aircraft engines as an example. You can see that currently they are from General Electric, but you do see that a ‘Made in China’ engine … is going to be developed, and once it is ready, it could be just integrated into the COMAC aircraft. That is the same thing (that) happened to Boeing or Airbus, for example, as you see that when General Electric or Rolls-Royce developed a new kind of engine, it is Boeing and Airbus that put it onto the platform that could be integrated.”

Weathering Supply Chain Disruptions

Jennings asked whether COMAC can evade supply chain disruptions by what is seen in China as the US-led global trade war?

The trade war does create uncertainties for COMAC in terms of the delivery and price of components, and the future remains unclear amid ongoing negotiations between China and the US, Li said. While COMAC can source certain parts domestically, such as jet engines made by the Aero Engine Corporation of China (AECC), it is less fuel efficient than its Western counterparts.

It would be difficult for COMAC to replace Western components with home-grown ones on a massive scale, as Chinese alternatives have yet to reach parity with Western products in terms of reliability, due to what appears to be manufacturing bottlenecks, said Chen.

But China has so far adopted an open attitude on the global supply chain for the C919 instead of aiming to build the entire aircraft itself; it aspired to be an integrator of the global supply chain the way Apple was in smartphones, Zheng said.

The panelists seemed to agree that until the C919 develops a track record for safety, reliability and demonstrated cost competitiveness and fuel efficiency, its major market will be in China, but that market will be considerable and shift paying money from Airbus and Boeing to paying more and more to COMAC and its Chinese supplier base.

China’s Markets

William Zheng reported on C919 sales projections: “According to a lot of industry estimates … most people say that China will add 100 to 200 airplanes every year. And if COMAC can supply, say 30% or 50% of that as a goal, that's good enough to sustain the company as one of the major players, if not dominant players, in the world. I will say it is not a huge market, but that is a comfortable market.”

Jason Li noted that aside from the Chinese market, the C919 can be sold in Southeast Asia: “Another thing is that the key is not looking for the European or American airworthiness certification. China is targeting a more strategic target, which has the Chinese regulatory authorities being automatically approved by other countries. So, for example, in Hong Kong … And you can see that Chinese authority, the CAAC (Civil Aviation Administration of China), is actually looking at other countries.”

Ralph Jennings then asked the panel: “So we've mentioned that the regulators surrounding China, especially Southeast Asia, as well as the airlines in this region, are probably the most likely accepters of the C919 aircraft. Does that mean … that the C919 is going to effectively become like the aircraft of the Global South? Is the Global South, to use that term, going to be using more of this aircraft because it can't get permits from Western countries, regulators?”

Frank Chen agreed: “So, … it is natural for China to first look at Southeast Asia or even Central Asia, as Jason mentioned, to sell the C919. And that will be a whole new story when it comes to the C929…, which is been designed from scratch to be a long-range, twin aisle jet… it is intended to fly to the West or even globally.”