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‘Made in China’ airliner faces commerce turbulence
The Tycoon Herald > Economy > ‘Made in China’ airliner faces commerce turbulence
Economy

‘Made in China’ airliner faces commerce turbulence

Tycoon Herald
By Tycoon Herald 6 Min Read
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For years, Beijing has had excessive hopes that Comac’s C919, China’s first domestically made airliner, may problem the plane market dominance of Boeing and Airbus, displaying China’s technological self-reliance and the advances made by its state-run aircraft maker.

However because the US-China commerce warfare escalates, analysts are warning that the C919’s heavy reliance on US suppliers for crucial parts may threaten plans to extend manufacturing and even hit the upkeep of passenger jets already in operation.

With China’s three massive state-owned airways already flying 17 C919s and Comac anticipating to construct at the very least 30 extra of the single-aisle plane this 12 months, the tensions between Washington and Beijing are highlighting how Chinese language firms may be closely depending on US firms of their provide chains.

The C919, which made its maiden business flight in China in 2023, has 48 main suppliers from the US, 26 from Europe and 14 from China, in response to Financial institution of America analyst Ron Epstein.

For many western plane parts for the jet, there are not any home alternate options available, analysts say, that means the US “can [halt] Comac in its tracks anytime it wants”, mentioned Richard Aboulafia, managing director of AeroDynamic Advisory.

One of the crucial essential components of the C919, its LEAP-1C engine, is constructed by CFM Worldwide, a three way partnership between the US group GE Aerospace and French producer Safran. Whereas China has been creating a home various, the CJ-1000A, it’s nonetheless being examined and is “not ready yet”, mentioned Dan Taylor, head of consulting at aviation consultancy IBA.

Whereas CFM Worldwide continues to construct the engines, together with in France, added Taylor, the core module is produced in Ohio. “If access to that was interrupted, it could become a major headache for Comac,” he mentioned.

Different US suppliers for the C919 embody Honeywell, Collins Aerospace, Crane Aerospace & Electronics and Parker Aerospace for varied crucial parts and aviation programs. Honeywell didn’t reply to a request for remark, whereas Collins declined to remark particularly on its relationship with Comac.

“Unlike many other industries, the commercial aerospace industry did not become dependent on low-cost manufacturing in China,” BofA’s Epstein wrote in a observe. “Most Chinese suppliers on the C919 are . . . not high value-add subsystems such as engines, controls, avionics or actuation.”

Sash Tusa, a UK-based aerospace and defence analyst, mentioned that whereas the US “has not [yet] said they will not supply [components for the C919] — that may be the next stage”. Ongoing after-market providers, together with restore and upkeep help of C919 jets already in operation, may also must depend on US suppliers, aviation analysts say.

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For now, it’s “likely that Comac has enough inventory to cover near-term deliveries”, IBA mentioned. China has additionally already granted some tariff exemptions on US imports, together with a number of aviation-related merchandise. Safran mentioned final week that China granted tariff exemptions for imports of sure aerospace components.

But when the US, sooner or later, decides to limit exports of key parts to China and “if China stops buying aircraft components from the US, the C919 programme is halted or dead”, Epstein mentioned.

Comac has been learning the consequences of the tariff will increase and gross sales have “not been impacted”, in response to one individual near the corporate. The plane producer didn’t reply to a request for remark.

China’s state-run airways can be worst-affected if US-China tensions derailed Comac’s manufacturing capabilities. By 2031, Air China, China Japanese and China Southern Airways are every anticipated to function fleets of at the very least 100 C919 plane, in response to Mayur Patel, head of Asia for OAG Aviation.

However Comac solely delivered 13 C919s final 12 months to Chinese language airways, and aviation consultancy Cirium Ascend mentioned just one C919 was delivered within the first three months of this 12 months.

Advisable

Air China's C919 aircraft is parked on the tarmac at an airport in Hangzhou, China

Analysts say Comac’s gradual manufacturing price means its plane can’t be Boeing or Airbus replacements for the foreseeable future. Beijing appeared to recognise this actuality on Tuesday final week, with the commerce ministry saying China was prepared to help regular co-operation with US firms, solely days after Chinese language airways rejected taking supply of any new jets from Boeing.

The tariffs and uncertainties round western provides of crucial parts may additionally immediate Comac to rethink its priorities to ship and fly the C919 past China.

The airliner nonetheless lacks worldwide certification, together with from the US’s Federal Aviation Administration and from Europe’s aviation regulator, which limits Cormac’s skill to fly exterior China and its efforts to spice up international gross sales. The European Union Aviation Security Company not too long ago mentioned it will take three to 6 years for the C919 to realize approval.

However in response to aerospace analyst Tusa, entry to abroad markets is probably not a major problem for the C919. “As long as it supplies a large proportion of the Chinese domestic market, that is good demand in and of itself,” he mentioned.

Further reporting by Claire Bushey in Chicago

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