China boosted its ambitions to challenge Airbus and Boeing Co for a slice of a global market worth US$1.7 trillion with a 100-plane order for its first commercial jetliner at a lavish ceremony yesterday.
State-owned manufacturer Commercial Aircraft Corp of China (COMAC, 中國商用飛機公司), announced the orders at the China International Aviation and Aerospace Exhibition, two years after launching designs for the 150-seat C919 aircraft.
As air travel becomes increasingly common with people jetsetting for business and leisure, COMAC forecast strong passenger demand and traffic growth over the next 20 years, which will cause the number of commercial jets to more than double.
PHOTO: EPA
COMAC said orders for its jetliner came from four Chinese airlines, which were expected to support the strategic project, and the leasing arm of General Electric Co, which will supply the engines together with French partner Safran SA.
It is the first time buyers have committed to the aircraft, which COMAC expects to start building next year, followed by a maiden flight in 2014 and first delivery in 2016.
“The customer signing lays a market foundation for the C919, which has smoothly entered the engineering development phase,” COMAC chairman Zhang Qingwei (張慶偉) said in a statement.
Officials did not give a value for the deal or break down the orders by airline.
A similar deal for Airbus or Boeing jets would be worth about US$7 billion at list prices, but aircraft are normally sold at a discount of at least 20 percent and analysts said China would have to lower prices even further to start foreign sales.
Established in 2008, COMAC wants to design and build large passenger aircraft with a capacity of more than 150 passengers to reduce the country’s dependency on Boeing and Airbus, which dominate the world market for large airliners.
As the country’s first homegrown large commercial aircraft, the C919 is intended to compete with Boeing’s 737 and Airbus’s A320 in the narrow-body segment, which Boeing expects to generate worldwide sales of more than 21,000 planes worth US$1.7 trillion over the next 20 years.
Analysts said foreign airlines would be skeptical about buying the plane until it had proven itself in service, but yesterday’s signing is the biggest breakthrough for the politically sensitive project since it was launched two years ago.
The buyers included the country’s three top airlines, Air China Ltd (中國國際航空), China Eastern Airlines Corp (中國東方航空), China Southern Airlines Co (中國南方航空), as well as HNA Group, parent of Hainan Airlines (海南航空).
GE’s leasing arm GECAS, owner of one of the world’s biggest airliner fleets, agreed to buy an unspecified number of aircraft, as did the financing arm of China Development Bank (國家開發銀行).
Experts said the involvement of GECAS signaled China’s -determination to win acceptance abroad, but efforts to woo international support suffered a glitch when foreign journalists were banned from attending the signing.
“GE will want to back their engine and their commitment may also help persuade the [US] Federal Aviation Administration [FAA] to support certification of the aircraft,” said Bradley Perrett, Asia-Pacific bureau chief of specialist magazine Aviation Week. “The FAA’s support will be critical for selling the aircraft to airlines in developed economies.”
COMAC said in a document that it expects China to take delivery of almost 4,400 airplanes worth about US$500 billion over the next 20 years as global passenger demand rises by an average of 5.2 percent and passenger traffic grows by 7.7 percent.
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