China's aviation future rests with the Comac C919 aircraft

On May 5, 2017, at Shanghai's Pudong Airport, a new passenger airplane took off on its first flight. The Comac C919 that soared into the sky over eastern China that day wasn't trying to set any records in size or speed or to demonstrate amazing new aviation technologies to the world. Rather, the slim white airliner with the lime green tail was built to send the world a simple message from the Chinese government: China can design and build a commercial aircraft. It won't seriously challenge the Boeing-Airbus duopoly for now, but that's not really the point.

It may sound like a bizarre move for a rapidly growing power like China, which in 2019 was the world's second largest market for commercial air traffic. But the country sees plenty of upside in its attempt to break into an enormously complicated and fiercely competitive industry valued at almost $200 billion. More than just a vehicle to fly the Chinese flag, the C919 is both a first step and an insurance policy. 

Even if it never flies outside of China, the plane is part of the country's long-term goal to become a leader in technology and heavy manufacturing. Selling those goods to the world is one part of this effort, but moving beyond the production of cheap commodity products also would allow the country to become more self-sufficient in everything from telecom equipment to transportation. And by building its own aircraft industry -- an area where the country remains dependent on Western suppliers -- China will keep billions of dollars at home and have its own airliner free of tariffs.

If it ever happens. Scott Kennedy, a senior adviser at the Center for Strategic and International Studies in Washington, D.C., calls the C919 a practice plane that has little chance of commercial success.

"They've decided to spend as much as needed and take as long as necessary until they have their own plane that can rival Boeing and Airbus ," Kennedy says. "The political ambition from the top leaders is that China has its own aircraft because, in their mind, great nations have their own airliners."

Advancing the C919 to the point where it can even carry passengers will be arduous. The airliner is years behind schedule -- though it was supposed to first fly six years ago, it's not expected to enter service until late 2021 at the earliest. It's also dependent on parts made in the US and Europe, and it brings nothing that similar aircraft from Boeing and Airbus don't already have.

"I would describe [the C919] like a Nokia phone competing against Apple's iPhone and Samsung's Galaxy S," says Shukor Yusof, a Singapore-based aviation analyst at Endau Analytics. "It's just not 'cool.'"

The C919 also faces significant regulatory hurdles in getting certified to fly outside of China and in gaining the confidence of airlines that aren't run by the Chinese government. But through its manufacturer Comac, China is pushing ahead to a bigger aviation future, even if it takes a generation.

Made in China 

Comac was formed in May 2008 by five companies, including the Aviation Industry Corporation of China, which has built a number of military and turboprop passenger aircraft. Though the new state-run firm announced the C919 the same month with a flight scheduled for 2014, the first plane didn't roll out of the factory until November 2015. Further developmental problems delayed the flight to 2017.

In building the C919, Comac is focusing along a narrow, purely nationalistic line where the experience of building the jet is what's important, says Richard Aboulafia, an aviation analyst with the Teal Group in Washington, D.C., who calls the C919 a "national jet."

"It's basically a matter of pride to build a tube with a flag on the back and the ability to fly through the air and not a whole heck of a lot else," he says. "But when joining the aerospace industry, you have to put your pride in the backseat."

Comac didn't reply to repeated email requests for comment.

Like the Airbus A320neo and the now-grounded Boeing 737 Max 8, the C919 is meant to be a short- and medium-haul workhorse connecting both large hubs and smaller cities. Comac's aircraft has a two-class passenger load similar to that of its would-be rivals (see chart below), it flies about as fast (0.78 Mach) and it uses similar Leap engines manufactured by CFM, a joint venture between General Electric and France's Safran. It's also about the same size as both planes, but with a profile that closely resembles the A320neo.

Aboulafia says the similarities are the C919's main problem -- it doesn't have new technology, nor is it more fuel-efficient, a feature that safety- and budget-conscious airlines place at the top of their shopping lists. "That's the difference between developing new technology and developing a tube on the flag on the back," he says. "There's no technological selling point for this jet." 

Yusof, of Endau Analytics, whom I spoke with over email, takes a similar view. "China is now the world's second largest economy, but significantly lags the US and Europe militarily in terms of technology."  

There's a reason for the C919's cautious design: Engineering and building a passenger jetliner is really hard. Boeing's been in the business for close to a century, and Airbus grew out of a handful of British, French and German airplane makers that had existed long before the consortium's 1970 founding.

But China doesn't have a long history of aviation engineering experience to rely on. Though the country has built military aircraft, planes carrying paying passengers are different -- it's not just about being powerful, they also need to be safe and reliable. Boeing and Airbus have operations in China: Airbus has an A320 final assembly line in Tainjin, and Boeing a facility for outfitting completed 737s in Zhoushan. But Chinese workers aren't performing the critical engineering work. Beefing up homegrown talent is key.

"There's nothing more complicated than making a commercial airliner except making 1,000 of them, essentially identical to each other," Kennedy says. "And then you have to service those thousand planes wherever they lie in a cost-effective, reliable way that convinces people to sit in them."

Comac's only other aircraft, the little-used ARJ21 regional jet, hasn't given the company an auspicious start. Though it entered service in 2016, only about 30 of the 90-seat aircraft have been delivered to a handful of Chinese airlines. In a March 2019 report he wrote on the ARJ21, Aboulafia called the aircraft "an overweight and stunningly obsolete product." AirineGeeks last year said it is "a poorly designed copycat of the McDonnell Douglas MD-80" (one of Comac's predecessor companies produced some MD-80s in China in the late 1980s).

Kennedy blames the inefficiencies on Comac's hierarchical structure, which he says prioritizes confidentiality and secrecy. Chinese companies that aren't state-owned, like Huawei or Alibaba, would be better suited to the job. "Building a successful commercial aircraft requires horizontal coordination across many different suppliers from around the world in a very open transparent way," he says. "Comac is really unfit for the task."

Price and performance

Yet, there is an area where the C919 can potentially compete: price. Most estimates put its per-unit cost at around $50 million, about half the price of both the A320neo and 60% cheaper than the Max 8. For China's nearby allies and airlines in developing nations eager to build an air travel infrastructure, the cheaper cost may be enough to win over some customers. 

"There's a desire to offer an Asian-made aircraft to Third World countries at lower prices compared to those marketed by Boeing and Airbus," Yusof says.

In a statement, Airbus said it welcomes the competition from Comac, which will be good for the development of the industry. "We believe that the C919 will bring new competition to the market and the Chinese market is big enough to have more than two manufacturers. Airbus was born in competition and thrived in competition."

Boeing expressed a similar sentiment. "Competition makes all of us better as it spurs innovation and the development of new technologies that meet the evolving needs of our customers," the company said in a statement. "This is good for airline and cargo operators and the broader flying public."

Kennedy is more skeptical about the C919's chances. While a Chinese company like Huawei can compete on price and technology, just relying on the former won't be enough for Comac. "The only other advantage is that it's got a Chinese label," he says. "Maybe for some that will be good enough. But in this industry, typically, that's not been a strong enough selling point -- that it's a new entrant and you buy it for nationalistic reasons."

Either way, Comac still has major hurdles ahead. Though certification by Chinese authorities is certain, letting the C919 fly within Chinese airspace, approval by the US's FAA and Europe's EASA is a much higher hurdle. Though the two bodies only regulate aircraft flown by their airlines or within their respective airspace, many other countries without a strong aviation safety agency follow their lead.

Kennedy says the FAA and EASA may even try to use their influence as a protective measure. "You could also see the US or Europe try to extend their regulatory authority even to countries where they're not certifying," he says. "They could try to push countries to not buy these planes."

Aboulafia sees another large hurdle the C919 will need to fly over, one that he says really matters. If Comac has any real hope for the C919 to succeed, he said the company must create a support structure for its airline customers to keep its aircraft flying. That includes not just supplying parts on demand, but also building a team of technicians who can travel anywhere quickly around the world to maintain and fix aircraft. 

It's an endeavour more complicated than building the plane itself.

"To develop that organically for a 150-seat jet is many billions of dollars," he says. "If you have a [faulty] airplane on the ground for more than 24 hours, you're not a serious person. You might as well just go into children's confectionery or something like that."

Boeing's troubles with the 737 Max family are unlikely to give Comac a boost, either. If the Max can return to service as predicted in the last half of this year -- Boeing has conducted certification flights after repairing the flight control system blamed for two crashes that killed 346 people -- it will be back in the air long before the C919 ever carries people. 

Still, Yusof says Comac may be able to take advantage of the situation. "It provides breathing space to fix the technical shortcomings and inadequacies and perhaps to use the MAX crisis to highlight to its potential customers that even a major aerospace player like Boeing is not averse to making mistakes."

A divorce jet

Aboulafia also calls the C919 a "divorce jet" for a potential future when free trade relations between China and Western countries break down to unsolvable levels. At that point, Chinese airlines will have to turn to a domestically made airplane. "I've spent decades now saying they're trying to break into the market and they're not gonna succeed," he says. "But I got it all wrong. The reality is that they're preparing for a great decoupling between the West and China."

Even if the country takes decades to grow a homegrown airplane business, it's a future that Western companies should worry about. China is a giant market for airliners, and the major Chinese airlines buy virtually all of their planes from Boeing and Airbus. By 2030, the country should surpass the US in terms of annual air passenger traffic, and in a report issued last year, Boeing predicted China would spend $3 trillion on 8,090 new planes by 2038. 

Kennedy says Comac is all part of a larger effort by the Chinese government to develop an import substitution strategy. Called "Made in China 2025," it pushes China to become a leader not just in aerospace, but also in sectors like telecom equipment and phones and 5G, AI, semiconductors, automobiles and medical products. "The goal is to comprehensively upgrade Chinese industry, making it more efficient and integrated so that it can occupy the highest parts of global production chains," Kennedy wrote in a report from last year.

Global production chains, however, are something Comac is unlikely to avoid. The company is no different than Boeing and Airbus in that it designs and builds airplanes, but it doesn't make most of the parts that go inside. Beyond CFM and its engines, suppliers include Honeywell , Rockwell Collins and Parker Aerospace. (China's Ministry of State Security has also been accused of hacking the C919's foreign suppliers in order to steal their intellectual property.)

For now those arrangements will continue, but if Western countries decide to restrict the sale of aircraft components -- a possibility the Trump administration has hinted at -- Comac has no Chinese-made products to fall back on, for engines or anything else. And though the country wants to develop its own aviation parts infrastructure, a completely domestically produced plane is unlikely -- it's not how the industry, Boeing and Airbus included, works. 

"The plane doesn't exist without those supplies, and if the US and EU decide to turn this off, they can stop the plane right away," Kennedy says. "No one builds a plane all by themselves."

Order and entry into service

Comac has now built six C919s and is continuing test flights with a plan to start carrying passengers in 2021. Yusof says hitting the 2021 target is possible, though the end of 2022 is more likely if there are further production delays. Aboulafia, meanwhile, doesn't see the plane entering service until 2023 at least. 

It's also unclear how the coronavirus pandemic, which has sharply depressed air travel demand worldwide, will affect its development. And further on, Comac says it is developing its next airliner, the 280-passenger wide-body C929, in a partnership with Russia's United Aircraft Corporation. 

To date, the company says it has 815 C919 orders from 28 airlines and aircraft leasing companies, almost all of which are Chinese (the airlines include China Eastern, Air China, Hainan and China Southern). Outside of the country, only Connecticut-based GE Capital has signed a letter of intent to purchase 20 C919s, but airlines in neighboring countries like Myanmar and Laos could be buyers. Yusof says orders could also come from Indonesia and from some countries in Africa, a continent where China has been investing heavily for years to extend its soft power. 

Until the plane actually enters regular service with an airline, though, the analysts I spoke with say the Comac's announcements about orders don't mean a whole lot. "They don't necessarily bear any resemblance to reality," Kennedy says. "To me those numbers of orders and timelines are really just PR rather than reflection of the plane's actual readiness to be delivered in and put in service."