New Chinese Passenger Plane to Challenge Boeing

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China is closer to launching its own wide-body passenger plane. It is expected to become the nation with the largest number of passenger jets in service, probably within a decade. Therefore, the day the plane is available to local airlines will be a day on which Boeing Co. (NYSE: BA) and Airbus face a new challenge in the region.

Boeing’s annual 20-year outlook for the industry, the most recent version of which covers 2017 to 2036, indicates the industry is expected to sell 41,030 over the period. Asia will be the largest market by far, with 16,050 sold over the two decades. The report says the Chinese market is growing at 20% a year.

The new C919, which is how the Chinese plane is designated, is aimed at the single-aisle, narrow-body market, a sweet spot for both Boeing and Airbus. The plane is expected to go into service in 2021.

According to the People’s Daily, a government-controlled medium:

The passenger jet, which made its maiden flight in 2017, is currently going through a number of test flights, Yang Zhigang, chief designer with Beijing Aeronautical Science & Technology Re-search Institute (BASTRI), said at the China Medium & Large Aircraft Development Summit 2018 recently held in northwest China’s Shaanxi Province.

The builders acknowledged that its development is well behind foreign competition. The People’s Daily’s coverage indicates that will not be true permanently:

However, the C919’s involvement in the international aviation industry will not only help up-grade China’s manufacturing capabilities, but also push for the progress of its competitors, Yang added.

Although China has not directly threatened the import of Boeing jets, the potential trade war between China and the United States could change that, which would give local aircraft manufacturers a new and significant edge. It is one that would undermine sales in China, which are absolutely essential to Boeing’s future.

While the C919 may be a challenge to Boeing and Airbus dominance in the country short term, a trade war would be an insurmountable hurdle.