Behind Airbus-Boeing truce lies a common rival: China
22 June, 2021
While the USA and Europe waged a 17-year trade battle over subsidies to Boeing and Airbus, China poured money into its commercial aircraft to defend myself against the Western aviation duopoly.
It took a common threat for the U.S. and Europe to finally end their dispute last week, as both sides signed a five-year truce suspending tit-for-tat tariffs.
U.S. President Joe Biden made it clear during his visit to Brussels: Washington and Brussels must "work together to challenge and counter China's non-market practices in this sector that give China's companies an unfair advantage".
For days gone by four years, state-run manufacturer Commercial Aircraft Corporation of China (COMAC) has run test flights for its 168-seat, narrow-bodied C919 airplane, a potential rival to Airbus's A320 and Boeing's B737.
COMAC expects to acquire airworthiness documentation from Chinese air traffic regulators this season, coinciding with the 100th anniversary of the Chinese Communist Party.
The aircraft received between $49-$72 billion in state subsidies, much more than the aid that Airbus and Boeing were given by their governments, according to Scott Kennedy, senior adviser at the guts for Strategic and International Studies in Washington.
"The real problem is that China is manipulating the market in playing Airbus and Boeing against one another and demanding technology transfers as a condition for orders," said Richard Aboulafia, aviation expert at Teal Group, market analysis firm located in Virginia.
China's air traffic has recovered considerably faster than elsewhere in the world as the united states brought the coronavirus outbreak under relative control prior to others last year.
Boeing believes that the Chinese market will require 9,360 aircraft within the next twenty years, one-fifth of the world total.
It could be a significant windfall for the A320 and the 737 MAX, though China has yet to authorize the return of the Boeing aircraft, that was grounded for 20 months in the U.S. following two fatal crashes.
While China remains reliant on Airbus and Boeing aircraft for the present time, the country's ambitions to have its own fleet are clear.
"The aeronautics industry is both a musical instrument of growth and a diplomatic and commercial tool which allows them to truly have a very comprehensive foreign policy in foreign markets," said Michel Merluzeau, analyst at AIR, an industry consultancy.
"The Chinese have the technological and industrial skills to make an airplane, there's no doubt about this," he told AFP. "The Chinese are ambitious. They're affordable. They know it will require time. They don't really want to defend myself against Airbus and Boeing in 2025."
The C919 was built with U.S. and European help. Only 14 of the aircraft's 82 suppliers are Chinese, according to Kennedy.
The wings and fuselage are Chinese but manufacturers in the united states have yet to master the skills of creating engines or airplane electronic equipment.
"They prepare their industry to meet domestic needs, it could be inferior products but at least it would be national," Aboulafia said.
The airplane is heavier compared to the US and European aircraft, rendering it less fuel efficient and thus more expensive to use.
But COMAC is accumulating customers.
The business says it has 815 orders from 28 clients, most from Chinese airlines -- though few are confirmed orders.
China Eastern Airlines was the first company to generate a firm order in March for five aircraft.
Huang Jun, professor at the school of aeronautic science and engineering of Beihang University, said the C919 will not be a game changer.
But it can be cheaper than its rivals and create an "ABC pattern" in China, with Airbus, Boeing and COMAC operating in the united states.
"We just hope we can join the forex market and occupy some market share," Huang said.
For Airbus leader Guillaume Faury, COMAC "will progressively become a decent player".
"So we will grow probably from a duopoly to a 'triopoly'" by the end of the decade for single-aisle aircraft, he said.
Source: japantoday.com