Chinese go big on sales, production and development

2015/09/23

Boeing has reached deals in China to sell 250 737s and 50 widebody jets worth 38 billion USD in total. Meanwhile, state-owned Commercial Aircraft Corporation of China (COMAC) also signed an agreement to set up a ‘completion centre’ in China for Boeing 737 airliners. The news – although not immediately confirmed by Boeing – was announced on Wednesday 23 September.

Despite current economic pains, China is thought to add well over 6,000 new aircraft to its airliner fleet in the next twenty years, worth over 900 billion USD. A Boeing factory in China would represent a shift in Boeing’s strategy in China. Rivalling Airbus already operates a final assembly line for medium-range Airbus A320 jets in Tianjin and plans to open a new completion and delivery centre for long-haul A330s.

But China wants a market for its own homegrown planes as well. COMAC in Shanghai is already developing the C919 narrow-body jet as well as the the ARJ21, a smaller regional jet. The company also plans to develop its own wide-body passenger plane over the next decade in cooperation with a Russian firm, industry officials say, over which both countries also seem to have reached agreement.

Under the agreement Russia will supply the intellectual property from the Ilyushin IL-96 widebody jet, which will serve as the basis for the design of a new aircraft, currently named the ShFS by UAC and expected to commercially be named COMAC 929. The type is expected in a 300 and 400 seat model, with a range of 2,700 nautical miles to serve internal markets within China and Russia. Roll out of the first flying prototype is planned for 2021, certification in 2023, and serial production and deliveries beginning in 2025.

The new-developed aircraft is unlikely to be a serious threat to Airbus and Boeing widebody sales in international markets. It could however damage sales in China, as the C919 is thought to do with narrow body sales.