China Challenges Boeing and Airbus in the Market

C919 300 Additional Orders and Total 1,115 Units for COMAC in China... China Demands 400 New Aircraft Annually
China Orders 332 Units from European Airbus This Year, Pressuring US Boeing

[Asia Economy Senior Reporter Cho Young-shin] An additional 300 units of the C919 passenger aircraft, developed independently by China, have been ordered.

[Image source=Reuters Yonhap News]

China's demand for aircraft is estimated to reach 7,000 to 8,000 units over the next 20 years, with the prevailing view that China will become the world's largest aircraft market in the future. As China joins the civil aircraft market currently dominated by the US Boeing and European Airbus, significant changes in the civil aviation industry are also expected.

According to Chinese media including China News Network on the 9th, COMAC (Commercial Aircraft Corporation of China), a state-owned Chinese aircraft manufacturer, signed a contract the previous day with seven Chinese aircraft leasing companies to purchase 300 C919 passenger aircraft. Including the existing order volume of 815 units, Chinese media reported that the cumulative contract number for the C919 is 1,115 units.

However, since formal purchase contracts and letters of intent are not distinguished, the exact number of actual purchase contracts remains unclear.

The C919, developed by COMAC since 2008, is known to have a passenger capacity of 158 to 168 seats and a maximum range of 5,555 km. According to aircraft specifications, the C919 is a medium-sized passenger aircraft (single aisle) similar to the Boeing 737 and Airbus 320 series. One C919 will be delivered to China Eastern Airlines next month, and four C919s will be delivered next year.

The price per C919 is $99 million (purchase price for China Eastern Airlines). This is about 20% cheaper compared to the B737 and A320 models. The prevailing view is that if safety issues are confirmed, demand for the C919 is likely to increase due to its price competitiveness.

Among the initial 815 orders, it is known that German and Thai airlines as well as a US aircraft leasing company have submitted letters of intent to purchase.

Shang Weiming, CEO of GE China, said, "The C919 signifies the takeoff of China's civil aircraft industry," adding, "COMAC will secure a position in the civil aircraft market alongside Airbus and Boeing." CEO Shang forecasted, "China's new aircraft demand will reach 8,000 units over the next 20 years," and "400 new aircraft will be needed annually." He also added, "The long-term growth fundamentals of the Chinese economy will not change." It is reported that the US GE supplies key components such as engines for the C919 passenger aircraft.

There is also analysis that China is using its domestic new aircraft demand as a shield to counter the US. On the 4th, China ordered 140 Airbus aircraft (worth 25 trillion KRW) as a gift for German Chancellor Olaf Scholz's visit to China. In July and September, China signed purchase contracts for 292 Airbus aircraft (53 trillion KRW) and 40 Airbus aircraft (7 trillion KRW), respectively. The prevailing analysis is that China deliberately excluded the US Boeing company to pressure the US.