Source: DTN News - - This article compiled by Roger Smith from reliable sources By Bloomberg News - Nov 16, 2010 10:20 AM ET
General Electric Co.’s leasing arm and China’s big three domestic airlines are among customers for the narrowbody plane, state-controlled Comac said in a statement issued at the Zhuhai air show in southern China today. Chinese airlines accounted for more than half the orders, said Zhang Xinguo, vice president of Comac shareholder, Aviation Industry Corp. of China.
Comac has a full-sized model of the front section of the aircraft on display at the show as it challenges Boeing and Airbus’s grip on a domestic plane market that could be worth $480 billion through 2029, according to Boeing. The Chinese planemaker expects to sell more than 2,000 C919s worldwide over 20 years competing against Boeing and Airbus’s most popular jets.
“The aircraft is of national importance,” said Harry Chen, a Shenzhen-based analyst at Guotai Junan Securities Co. “But, as it’s only on the drawing board so far, we still have to see how fuel-efficient and less expensive it really is.”
China Customers
The C919’s Chinese customers include Air China Ltd., China Southern Airlines Co., China Eastern Airlines Corp., HNA Group Co. and CDB Leasing Co., according to the statement. It didn’t say how many planes had been ordered by each customer.
Air China’s head of investor relations, Rao Xinyu, and China Eastern spokesman Li Jiangdeclined to comment. Calls to China Southern’s joint board secretary Xie Bing went unanswered. GE Capital Aviation Services Ltd., the world’s largest plane lessor, said it agreed to buy as many as 10 C919s.
The C919, which has 166 seats in its standard version, competes with Boeing’s 737 and the Airbus A320. The plane is scheduled to make its maiden flight in 2014 before entering service two years later.
Gecas, as the GE leasing unit is known, also announced an order for as many as 25 China-made ARJ21 regional aircraft at the last Zhuhai air show in 2008, as GE seeks to boost sales in the world’s fastest growing major economy. The 70-seat ARJ21, China’s first regional jet, is due to make its maiden exhibition flight at this week’s show.
China first announced plans for the C919 in 2008 to help develop a globally competitive aerospace industry and pare its reliance on imports. The nation will trail only the U.S. in plane orders over the next 20 years, according to Boeing.
‘Enough Pie’
“There’s certainly enough pie locally to keep Comac and their partners busy for a long time,” said Derek Sadubin, chief operating officer at industry consultants, Centre for Asia- Pacific Aviation in Sydney. “It does remain to be seen whether the aircraft does sell overseas.”
Comac is working with overseas suppliers on the C919, including CFM International Inc., a venture between GE and Safran SA that has won a $10 billion engine contract. Other suppliers include Honeywell International Inc., United Technologies Corp. and Parker Hannifin Corp.
China’s economic growth has stoked demand for aircraft and boosted its importance in the global aviation market. Air China, China Southern and China Eastern are all among the world’s four largest carriers by market value. China Southern is Asia’s biggest by passenger numbers.
Nationwide passenger numbers may jump fivefold in the 20 years ended 2029, AVIC, the nation’s largest aerospace company, said today.
Airbus Order
China is due to receive 112 aircraft from Airbus this year, or 22 percent of the Toulouse, France-based planemaker’s total production, Ascend said this month. It will take 71 planes from Boeing, or 15 percent of output, according to the London-based aviation data company.
Airbus this month announced an order for 102 planes from China, including 50 A320s. The planemaker will assemble half of the single-aisle planes at a plant in Tianjin, China, its only production line outside of Europe. Chicago-based Boeing has won 737 orders this year from Air China, Okay Airways Co. and China Southern’s Xiamen Airlines.
“We welcome all competition,” Jim Simon, Boeing’s vice- president for China commercial-airplane sales, said at the show. “It makes the industry better, frankly, because it makes us sharper at our game.”
Boeing and Airbus also face other new competitors in the single-aisle segment, the largest part of the global plane market. Bombardier Inc. is due to begin deliveries of its CSeries planes, which sit as many as 149 passengers, in 2013. Empresa Brasileira de Aeronautica SA, known as Embraer, has also said it’s considering plans to build a similar-sized aircraft.
“We were born into competition 40 years ago, and now we’re number one,” Airbus’s China headLaurence Barron said at a show press conference. “Frankly, we’re used to it.”
China had 1,259 commercial aircraft at the end of 2008, according to the nation’s aviation regulator. In 1980, it had a fleet of about 140 commercial planes, mostly seating less than 50 passengers, under the management of the air force.
--Liza Lin and Wing-Gar Cheng. With assistance from Irene Shen in Shanghai. Editors: Neil Denslow, Michael Tighe
To contact the reporter on this story: Liza Lin in Shanghai at llin15@bloomberg.net; Wing-Gar Cheng in Hong Kong atwgcheng@bloomberg.net
To contact the editor responsible for this story: Neil Denslow at ndenslow@bloomberg.net
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