New China Airliner Major Threat to Boeing

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Boeing Co. (NYSE: BA) recently said that Asia, and particularly China, are the key to its future growth. China just put up a barrier to those ambitions. Its new, locally built jetliner has passed a critical series of tests.

In Boeing’s most recent 20-year industry forecast (2016 to 2035), its experts wrote:

The Asia region continues to demonstrate vigorous economic growth at a rate of 4.1 percent per year, outpacing the global average by 2.9 percent. Driven by China and India as the main engines of growth, the region’s share of world GDP is projected to rise from 31 percent today to 39 percent by 2035. The significant growth rate in this emerging market is expected to continue. As a result, airlines, airport capacity, and passenger traffic are expected to experience a robust growth rate in the next 20 years. Demand in commercial aviation is also coming from the continuing expansion of the middle class in Asia, where a greater sector of the population is reaching income levels that make flying more affordable.

The People’s Daily described the latest development in China’s local initiative:

China’s first large domestically designed and built passenger jetliner has passed a major technical assessment, bringing it a closer to its maiden flight, sources with the developer said Saturday. An evaluation committee consisting 63 aviation specialists from across China has agreed the C919 is technically ready for its maiden flight, said the Shanghai-based aircraft maker, Commercial Aircraft Corp. of China (COMAC) in a press release.

The experts have worked in seven teams to assess the jet’s design, structure and performances, which they have tested in labs, on board and during low-speed taxiing, it said. The committee has proven the C919 is technically airworthy but the jet is still subject to electromagnetic compatibility and taxiing tests before it takes to the air.

The jet was built in 2015 and COMAC completed the onboard systems installation as well as major static and system integration tests before the technical assessment. The C919, with over 150 seats and a standard range of 4,075 kilometers, is expected to compete with the updated Airbus 320 and Boeing’s new-generation 737, which currently dominate the market. By the end of 2016, 21 customers had placed orders for more than 500 C919 aircraft, and COMAC expects to sell at least 2,000.

Boeing is often identified as the single largest American exporter.