I was perusing a couple of news articles earlier in the week relating to the Word Trade Organization’s latest intervention in the Boeing / Airbus spat.
A sentence or two hiding at the very bottom of an article by Simon Jack in the BBC News website caught my eye. The United States and Europe, he says, are not the only countries who are giving questionable subsidies to aircraft manufacturers. Bombardier, he says, receives governmental subsidies from the Canadian government. An even bigger threat to the A+B (Airbus and Boeing) duopoly is making itself known, not necessarily for the right reasons, in the east. It’s a company I’d never heard of previously, but I’m not terribly familiar with the highly competitive world of commercial civil aviation.
Jack thinks the least regarded threat to A+B comes from COMAC, the Commercial Aircraft Corporation of China, Ltd. Established in 2008, COMAC is currently engaged in the production of a couple of aircraft, which are intended for China’s rapidly expanding internal airline market.
COMAC ARJ21 Xiangfeng “Flying Phoenix”
By Peng Chen (Flickr: China ARJ-21)
CC BY-SA 2.0 via Wikimedia Commons
The first jet to be marketed is the ARJ21, originally developed by Aviation Industry Corporation of China, and which looks very much like a scaled down (some sites less charitably say “warmed over”) DC-9 / MD-90. This may be partly due to the fact that the factories producing the ARJ21 are the same factories that participated in the abortive attempt to build the MD-90 in China, which ceased after two examples (of the 40 proposed) were completed in 2000. COMAC’s claims for the ARJ21 as a wholly indigenous product are further undermined by its wing, which is a product of the Antonov Design Bureau in the Ukraine, and the engines and avionics, which are are predominantly American.
The ARJ21 was a key project in the 10th Five-Year Plan of China which began March 2002. The fact that by December 2016 only six aircraft have been produced, and only two of these are in airline service in China, is perhaps indicative of the struggle that the project has encountered. COMAC has been trying for several years to gain American FAA type approval for the ARJ21, a necessary step for its products to operate globally, and that this has not been forthcoming.
COMAC’s other product, The 168-seat C919, is intended to be a direct competitor with A320 and venerable Boeing 737 families. Although looking good at its roll-out (see the YouTube video below) with a projected first flight in 2017, the development path may conceivably be as rocky as the ARJ21.
It’s certainly very tempting to think COMAC is waiting in the wings for some kind of coup, but one also needs to consider that the competition is in some cases very well established already. Embraer and Bombardier, while admittedly competing for third place behind A+B. demonstrate that COMAC has a longer march to market than our amorphous fear of Chinese business may suggest, however justified we may feel considering their near stranglehold on multiple sinews of world manufacturing.
A quick look through Wikipedia will produce the following figures of aircraft which its editors (reasonably) feel to be comparable with the ARJ-21 and C919.
Boeing 737 family (9,247 units produced) – 737 MAX forthcoming
Airbus A320 family (7,297 units produced) – A320neo forthcoming
Embraer E-Jets (1158 units produced)
Bombardier CRJ700 series (788 units produced)
Bombardier CSeries (10 units produced)
Sukhoi Superjet 100 (114 units produced)
Antonov An-148 (39 units produced)
Mitsubishi Regional Jet (4 units produced)
Irkut MC-21 (1 units produced)
Of particular interest are the recognizably Russian types produced under the umbrella of UAC, the United Aircraft Corporation.
Sukhoi Superjet 100-95B EI-FWA of Irish regional airline CityJet crew training at Prestwick Airport, UK, June 2016. The Sukhois are intended to replace the airline’s Avro RJ85s
By Mark Harkin (EI-FWA Sukhoi Superjet 100-95B) CC BY 2.0 via Wikimedia Commons
Vladimir Putin created UAC in 2006 by merging governmental holdings of Ilyushin, Irkut, Sukhoi, Tupolev, and Yakovlev into a new company in which the Russian government holds a majority stake. UAC effectively consolidates Russian private and state-owned companies engaged in the production of commercial and military aircraft. While some western journalists may perceive a commercial threat from COMAC, it would seem to be that a star rising slightly nearer in the east might also bear scrutiny.
Articles mentioned in the text are listed below.
Simon Jack at http://www.bbc.com/news/business-38131611 Exclusive: WTO rules Boeing’s state subsidies illegal (28 November 2016). The article discussed the subsidies paid by the State of Washington to encourage Boeing to build the wings of the 777x aircraft there.
A later article (in the same day) http://www.bbc.com/news/business-38131617 Boeing tax break ruled unlawful by WTO said that the United States government has been given 90 days to drop the special tax exemption or subsidy.
The New York Times mentioned http://www.nytimes.com/2016/11/28/business/international/world-trade-organization-rules-against-boeing-tax-break-for-new-jet.html? that this was the latest volley in a spat between Airbus and Boeing dating back 12 years in which each side has accused the other of raking in millions of dollars in special governmental aid.
Forbes’ article http://www.forbes.com/sites/scotthamilton5/2016/11/28/wto-boeing-ruling-gives-airbus-good-pr-but-its-meaningless/#1a1e8c0c4a3c was interesting in that it pointed out that
the WTO has no enforcement powers, the United States was likely to appeal the ruling and that this particular case will be echoing round the courts for at least two more years.