Commentary
Two companies have dominated the world’s commercial airline market since the 1990s: Boeing from the United States and Airbus from Europe. For years, the competition has been fierce, with the lead in orders and production going back and forth between Boeing and Airbus. This production race between the two was churning out airliners at astounding, near World War II, levels until COVID-19 in 2020.
However, Airbus has been pulling away from Boeing because of additional issues like the 737 Max fatal accidents, riveting quality control issues, and plug blowouts in flight. An industry source of record, Forecast International, stated on June 21: “In 2023, in total, Boeing and Airbus delivered 528 and 735 aircraft compared to 480 and 663, respectively, in 2022. In 2023, Airbus won the deliveries crown for the fifth consecutive year.”
Airbus and Boeing have dueled for years without any distractions from other manufacturers. However, another company is looking to step into this two-way race or duopoly.
That company is Chinese state-owned aerospace manufacturer Comac (Commercial Aircraft Corp. of China), which has been blacklisted by the U.S. government for having ties to the People’s Liberation Army.
Meanwhile, both Airbus and Boeing have experienced setbacks linked to China.
Comac C919
The second-largest aircraft lessor in the world, Dubai Aerospace Enterprise (DAE), is forecasting that 2024 will be the breakout year for Comac. Comac has been working for years as a direct competitor to the Boeing 737 and the Airbus A320. Comac received two large orders totaling 200 aircraft from Chinese airlines to be delivered over several years until 2031. While the Chinese airlines have hundreds of Boeing and Airbus aircraft on backorder, these were the first major orders for the Comac aircraft.
It is estimated that it will take another 10 years for Comac to achieve the Boeing/Airbus level of annual orders, but the 2024 orders were a good start. However, two key issues are holding Comac back. First, the certification of the C919 and other Comac aircraft by the U.S. Federal Aviation Agency (FAA) and the European equivalent, the European Union Aviation Safety Agency (EASA), is lagging.
Steven Udvar-Hazy, the executive chairman of one of the giants of commercial airliner leasing, Air Lease, was dismissive of the C919.
“I do not believe at this point in time that the FAA and the [EASA] would certify the 919 and its current state for export,” he said in March 2024.
The other issue is the dependence of Comac on foreign parts. Comac’s supply chain incorporates non-Chinese companies and has come under significant export control scrutiny, which has slowed the C919 development. Comac is considered a questionable Chinese company with ties to the Chinese Communist Party (CCP) and the People’s Liberation Army. Sens. Marco Rubio (R-Fla.) and Rick Scott (R-Fla.) have this view of Comac: “Comac’s status as a fully-owned state enterprise, as well as its close relationships with the CCP and other aerospace companies, create a vulnerability that undermines both the national and economic security of the United States.”
Backlog and Challenges Create Opportunity for Comac
Two factors are giving Comac an opening to the broader airline market. While aircraft deliveries are below the heights set right before COVID-19, the backlog of aircraft orders is stunning. Currently, there is a 13-year backlog of orders for Airbus and Boeing. This means an airline must wait up to 13 years for delivery if it wants a new aircraft. There are business processes where an airline can move higher up the assembly line queue by paying a premium. Smaller airlines from less developed nations potentially cannot afford the premium or the wait time, which might lead them to the C919. Success in orders has a downside.The other issue is the string of engineering issues that have greatly shaken confidence in the once highly regarded Boeing. Some point to Boeing’s absorption of McDonnell Douglas in 1997 as the starting point of a pathway from engineering excellence to cost-cutting as the corporate priority.
Boeing appeared to be on the road to recovery after the 737 Max episode but has been caught in a number of bizarre events, such as two whistleblowers committing suicide and now a stranded space crew that seems almost incredulous. This aerospace drama with Boeing gives an opening to Comac.
Fake Titanium Parts From China
Boeing and Airbus self-reported to the FAA when a key supplier, Spirit AeroSystems, identified that titanium parts that were traced to China were falsely certified as titanium. This developing story shows the complexity and difficulties in establishing the trusted heritage and pedigree of parts back to the raw source material.Titanium is a key aerospace material that was first used in large quantities in the legendary SR-71 high-speed spy plane. The SR-71’s titanium source came from the Soviet Union, of all places, during the height of the Cold War.
The CIA set up a complex series of front companies to trick the Soviet Union and acquire the titanium for the SR-71, which is 92 percent titanium. In a possible reverse application of this model, a Chinese company has somehow become intermeshed into the Boeing and Airbus civil airliner production supply chain and inserted what appear to be fake titanium parts. A Turkish company received titanium and certifications from a Chinese supplier that were then passed to an Italian company for further processing into parts for the Boeing and Airbus supply chain, where eventually it was noticed that the titanium and the certifications looked odd, which began the investigation.
Boeing and Airbus have an enormous order backlog and are dealing with fake parts, while Boeing has become mired in a quality control crisis. All these matters point to an opportunity for the Chinese C919, at least with airlines from countries not concerned with Western certifications.
Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times.
