Air Transportation: China Does A Boeing


June 4, 2022: For over fifty years China has been working towards designing and building its own commercial airliners. Finally, COMAC (Commercial Aircraft Corporation of China), a state-owned firm did it with the C919 narrow-body twin-engine airliner. The C919 competes with the latest Boeing 737 model, the 737 Max. The Max ran into serious quality problems after introduction, which was later traced back to a change in management selection as Boeing sought to reduce costs and increase its ability to compete with its major rival AirBus by no longer requiring senior managers to have an engineering, as well as a business background. Fixing that problem will take the rest of the decade to complete.

Commercial aircraft design and manufacturing was developed in the United States a century ago when automobile production pioneer Henry Ford turned his attention to rapidly advancing aircraft technology which grew enormously during World War I and continued in the 1920s for military aircraft. Ford showed the world that commercial transport and passenger aircraft were possible and profitable. This set off the creation of many new commercial aircraft manufacturers in the United States and other industrialized countries. Because European nations were still recovering from World War I and in the 1930s preparing for World War II, the Americans maintained their lead in commercial aviation through World War II and after. There was lots of competition in the United States and eventually significant commercial aircraft manufacturers emerged such as Boeing, which was founded in 1916 to design and build components for military aircraft. In the 1920s Boeing was one of the many American aviation companies that noted the success of the aircraft division of Ford Motors and began doing the same. Ford Aviation was a victim of the 1930s Great Depression. Ford converted car production to manufacture bombers during World War II but never returned to commercial aviation. Boeing also switched to military aircraft production during World War II and designed and built bombers that were converted to commercial transports after World War II and later models added jet engines.

Boeing continued to grow because its engineering and business innovation led to the most reliable and competitive designs plus an ability to absorb or merge with major competitors, with the name of the enlarged firm remaining Boeing. By the 1990s Boeing was able to merge with its largest rival, Douglas, to become the largest commercial airline producer in the world. Europe had lots of innovative and smaller aircraft companies and European countries agreed to form a Boeing Rival, AirBus. Many smaller European aircraft manufacturers were merged into the new AirBus firm which proved to be an effective and profitable rival to Boeing. The 737Max debacle slowed Boeing down and gave AirBus opportunities to gain market share.

The Soviet Union never developed a competitive commercial aviation industry because the kind of innovation and economic freedom that made Western companies so successful was not allowed in a communist state with a state-planned economy. China was in the same situation until the 1980s when Chinese leaders realized that you had to cut loose entrepreneurs and innovative Chinese engineers and managers to do what the West had achieved. The collapse of the Soviet Union in 1991 proved the Chinese to be right and after that China aimed for world domination in as many manufacturing industries as possible. China was still hobbled by a lack of domestic engineering skills that enabled the development and production of high-tech items like aircraft engines and many other components of world class military and commercial aircraft. As China became a major market for Western airliners China gained enough clout to persuade Boeing and Airbus to establish assembly plants in China that would produce Boeing 737s and the similar AirBus 320s, the commercial aircraft most popular in China. AirBus and Boeing still had to provide many components, like engines, that China could not yet produce. The Chinese government founded COMAC in 2008 by merging several smaller aircraft and component companies. COMACs first product was the ARJ21, a 90-passenger regional airliner powered by two General Electric jets. The ARJ21 ran into a lot of development problems which delayed introduction of the ARJ21 by eight years. Technically, the first ARJ21 entered commercial service in 2016 with one aircraft in one airline. This was part of the development process and mass deliveries did not begin until 2020. The delay enabled COMAC to quickly develop the larger (105 passenger) ARJ21-900 as well as freighter and 20 passenger business jet versions.

The experience with the ARJ21 led COMAC to begin production and further development of the C919, which made its first flight in 2017. Seen as a cheaper competitor for the 737 and AirBus 320, it encountered even more problems that the ARJ21. As of mid-2022 only seven development aircraft have been built. This included accusations of stealing technology and manufacturing techniques so that China could produce key components in China as Chinese developed. The Chinese espionage effort was discovered in 2015 and arrests made. This sort of thing is nothing new but in the case of commercial aircraft it limited export sales. It also made several smaller Western aircraft manufacturers rethink deals with China for co-production. This espionage was one reason why America implemented sanctions and trade-restriction against China in 2018.

The C919 also lost another competitive edge, price. Originally designed to sell for about half what 737s and A32os cost, fixing all the problems encountered have increased the cost of the C919 to the point where it is nearly the same as 737 and A320. COMAC already has orders for over a thousand C919s from Chinese airlines but greater profits only come via export sales. Artificially lowering the price to gain sales is illegal according to the international trade agreements China agreed to in order to gain access to major export markets. The Chinese industrial espionage efforts will further limit export sales. Undeterred, COMAC plans to eventually dominate the world-market for narrow-body airliners like the 737 and A320. COMAC is planning on developing larger wide-body airliners as well and by the middle of the century be a major competitor for Boeing and AirBus.




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