Tuesday, November 16, 2010

Boeing, Airbus, Embraer in Trouble: End of Major Aircarft Sales to China; $480B by 2029

Boeing, Airbus, and Embraer had been successfully selling aircraft to China for decades.

At the Zhubai air show today, Commercial Aircraft Corporation of China Ltd announced its first 100 orders for its new C919 168-seat aircraft, a model that competes wit the most popular planes, the Boeing 737 and the Airbus 320.

According to the AP, The announcement shows "China's ambitions to create Asia's first successful commercial airplane business in a challenge to Airbus and Boeing's long-standing domination of the industry".

They are also offering VIP flights on itsARJ21 jet (70- to 110-seats), for which it has 240 orders.

"China launched its modern commercial aviation industry less than a decade back and two years ago reorganized it to create Comac to build the ARJ21 and develop the C919. That was part of an overall campaign to create Chinese industries able to compete at the global level, and also stands to give China bragging rights as the only Asian country to successfully produce commercial aircraft after attempts by Japan, South Korea and Indonesia failed to get off the ground".

While the adoption of these new aircraft outside China will no doubt face many hurdles, the world's biggest market for new aircraft is precisely China. According to Boeing itself, China may need $480 billion worth of aircraft by 2029. Obviously that was too good to pass for the Chinese.

Boeing and Airbus have  a grace period as Comac will complete the design this year, with the finer details worked out by 2012. The first test flight is planned for 2014, with the first planes delivered in 2016.

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