Is The World Large Enough To Support Airbus, Boeing And Comac?

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Is the world large enough to support Airbus, Boeing and Comac? Could we end up with a duopoly, without Airbus or Boeing, if China dictates that its airlines and lessors buy homegrown products?

Aviation Week Beijing Bureau Chief Bradley Perrett answers:

No major shift is likely to happen before the late 2030s or even the 2040s, because Comac is far from ready to go head-to-head with the two Western airframe companies. Predicting how the competition will play out so far ahead is highly speculative, so the best that can be done is to mention a few factors.

If Comac has a near monopoly in the local market, it will have a base production rate that will help it achieve the low costs it will need for competing elsewhere. On the other hand, a state company with a guaranteed local market does not have a lot of incentive to work hard at making money abroad. The Chinese Communist Party can address that to some extent.

China could simply subsidize its way into the market if its airliners are reasonably competitive. (Real duds can’t be given away.) This raises questions about how the U.S. and Airbus partner countries would react to such subsidies. Would they retaliate by barring Comac from their markets? That would depend on what trade agreements are in place in future decades. But China’s international relations are declining so fast that we must wonder whether it will have access to Western civil aeronautics technology in 20 years. Curtailment of Western supply, especially for engines, would set back the Chinese commercial aircraft effort many years.

Why would it take until the late 2030s or later for China to knock Airbus or Boeing into the third spot? Even if the Comac C919 proves to be about as efficient in operation as the Airbus A320neo and Boeing 737 MAX—as it should be, on paper—the program is probably running at least 6-7 years behind the Neo and MAX. After entry into service, more years will be needed to establish a reputation for reliability and support. Production has to ramp up and cost must be gradually driven down. Even if all went well from now on, by the time the C919 began to make progress in the international market, either or both of the Western manufacturers should be close to a next round of product renewal—moving Comac’s goalposts and requiring improvement in the C919.

The Chinese-Russian Craic CR929 widebody is now due for first delivery in 2028-29, so it faces much the same problem.

By the 2040s, propulsion technology may have changed. Aircraft and engines may be much more integrated. Comac could be back to square one. Yet, Airbus and Boeing could be too, and they would not have Chinese taxpayers’ money to spend on unusually challenging development programs.