ValueBuddies.com : Value Investing Forum - Singapore, Hong Kong, U.S.

Full Version: China rolls out first large passenger jet
You're currently viewing a stripped down version of our content. View the full version with proper formatting.
China rolls out first large passenger jet
  • CHUN HAN WONG
  • THE WALL STREET JOURNAL
  • NOVEMBER 03, 2015 10:15AM


[Image: 192127-c5a381ee-81b8-11e5-b7f9-ef4fc8c05fd4.jpg]
China's first big passenger plane C919, a narrow-body jet which can seat 168 passengers goes on display at a facility in commercial hub in Shanghai. Source: AFP
[b]China’s first large passenger jet has rolled off the assembly line after years of delays, bringing Beijing’s dream of developing a rival to Boeing and Airbus Group closer to reality.[/b]
Still, the single-aisle C919 airliner won’t be delivered to airlines for at least another three years, highlighting the difficulties China has faced in becoming a global player in aviation.
Developed by state-run Commercial Aircraft of China, or Comac, the twin-engine jet was initially set for its first flight in 2014, ahead of commercial deliveries starting in 2016. Production setbacks forced Comac to repeatedly extend its deadlines. Company executives say flight testing should start next year, with deliveries expected in 2018 or 2019 at the earliest.
Comac hasn’t disclosed list prices for the C919.
Thousands of guests, including government officials and aerospace executives, witnessed the C919’s rollout at an assembly plant near Shanghai’s Pudong International Airport, according to Chinese state media.
As patriotic songs blared in a large hangar, the C919 prototype — decked out with white, blue and green Comac livery — emerged from behind red curtains under a banner that proclaimed “Dreams take flight” in Chinese, footage aired by state broadcaster China Central Television showed. The jet was then towed past guests before slowing to a stop just outside the hangar.
The 158-to-174 seater, designed in Shanghai but incorporating components sourced globally, relies on foreign technology, including avionics from Rockwell Collins and engines developed by CFM International, a joint venture between General Electric and the Snecma engine unit of France’s Safran. The jet is expected to undergo ground and flight tests spanning two to three years, before attaining certification from China’s civil-aviation regulator and entering commercial service.
China unveiled plans to develop the C919 in 2006 as part of a decadeslong effort to create an advanced aerospace sector capable of breaking the Airbus and Boeing duopoly. Coming after an abortive effort in the 1970s and early 1980s to develop a large commercial jetliner, the C919 was meant to help satisfy growing air-travel demand on the mainland, competing with the likes of Airbus’s A320 family and Boeing’s 737 series.
Airbus, in an emailed statement, congratulated Comac for achieving an “important milestone” and said it welcomed competition from the Chinese aircraft maker. “The market is big enough for more than two manufacturers,” the European aerospace giant said.
Airbus and Boeing, for their part, are seeking to shore up their market shares in China by building up an industrial footprint on the mainland, and developing new aircraft that can outperform coming Chinese rivals. Airbus assembles some A320s in the northeastern city of Tianjin, while Boeing in December announced plans for a 737 completion-and-delivery centre in China, where aircraft will be painted and interiors installed.
Both companies also plan to widen the number of jets they make using carbon-fibre composite materials, which are lighter and considered more efficient. Boeing Chairman Jim McNerney said last year that Boeing was considering a new composite-materials aircraft that would replace its 737 Max in part because of potential competition from the C919.
About 12 per cent of the C919 airframe comprises advanced composite materials, according to the official Xinhua News Agency. Industry experts say Comac had hoped to use composite materials for about 20 per cent of the jet, so as to reduce fuel consumption, carbon emissions and operating costs, but scaled back those plans amid production delays.
Delays to the C919’s commercial debut mean it could be pitted against newer versions of the Airbus A320 and Boeing 737 that will likely surpass the C919 in operational performance, said Derek Levine, an adjunct professor at the City College of New York, who studies China’s aviation policies.
A challenge for newcomers like Comac is breaking into the vast customer base that Airbus and Boeing already have, and economies of scale that enable the two aerospace giants to build planes at low cost.
Industry analysts nonetheless expect Comac to secure a significant chunk of China’s aviation market, thanks to virtually guaranteed sales to domestic carriers amid booming demand. Boeing, for its part, projects China’s commercial aeroplane fleet to nearly triple to more than 7200 aircraft by 2034, including demand for some 4630 single-aisle planes.
Shanghai-based Comac said it has received 517 orders for the C919 from 21 customers, though Chinese airlines — whose aircraft purchases are controlled by the government — account for the vast majority.
Industry analysts say foreign airlines are reluctant to invest in unproven aircraft lacking operational track record and safety certification from Western regulators like the US Federal Aviation Administration and the European Aviation Safety Agency.
“If you’re going to get foreign orders for the C919, I think they’re going to need to see a lot of data about how the aircraft performs,” said Greg Waldron, the Asia managing editor of industry publication Flightglobal. “The airlines will need to see tonnes of operational data, they’ll need assurances of international customer support.”
Even so, Comac is already planning to develop an even larger commercial airliner — the C929 widebody — that industry executives say will be capable of carrying more than 300 passengers and would compete with the Boeing 777.
The C919’s rollout comes as China prepares for the commercial debut of another homemade passenger jet, the smaller ARJ21 regional jet, which has been plagued by repeated production delays that set back the original 2010 delivery schedule.
According to Xinhua, launch customer Chengdu Airlines is expected to take delivery of the 78- to 90-seat turbofan aircraft by the end of this year.