Will the next plane you fly in be "Made in China"?

An abridged introduction of COMAC, China’s aircraft manufacturer.

大家好/Hello everyone,

On May 11th, 2008, the Chinese Vice Premier at the time, Zhang Dejiang, and Shanghai Party Chief Yu Zhengsheng, unveiled the plaque for China's first-ever civilian-only aircraft company. This was the birth of the Commercial Aircraft Corporation of China Ltd. (COMAC).

COMAC was created with the goal of researching, developing, manufacturing, and marketing a homegrown large passenger aircraft to the world's largest domestic civil aviation market, China. 

Its mission? To disrupt the duopoly that Airbus and Boeing have enjoyed since the 90's when it comes to large aircraft manufacturing for civil use.

You see, airplane manufacturing is not an easy market as it requires extremely advanced and technical human capital, mind-blowing costs, and a long time to even break a profit. Up until the COVID-19 pandemic, Airbus forecasted a global need of 39,000 new airplanes in the next 20 years.

The aviation industry, in general, will suffer greatly in the next decade due to the pandemic-related closing of borders, and the strong reduction of global travel needs. But China is an exception. In October 2020, the country had already rebounded to pre-pandemic numbers in terms of domestic flights. Talk about a fast recovery!

In this week's article, I would like to go through COMAC's trajectory until now and its future. Will China's shiny aircraft manufacturer trump the Western duopoly? Will your next flight in China be in a homegrown aircraft? Let’s try to find out. 

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COMAC

Before COMAC's inception, all of China's civilian and military aerospace products were associated directly with state-owned defense conglomerates. The country had been trying since the 70s to expand its knowledge in this type of technology, even through joint ventures (basically foreign companies entering in a partnership with Chinese ones) in the 80s and 90s, such as the one with McDonnel Douglas, without any success. In the end, the partnership ended due to allegations that the Chinese were diverting technology towards military use.

COMAC's logo

In reality, COMAC is loosely connected with China's Air Force. It is the result of a reshuffle of certain AVIC (Aviation Industry Corporation of China) areas, but not directly owned by the military, or named as a defense contractor. Still, the possibilities of dual-use of aerospace technology still weigh in the mind of many, like the United States and the European Union.

The company has been fraught with many issues since its inception. It started from the bottom and has been building its infrastructure for the past 10+ years. To give you an idea of the rates of production of the company, Boeing averaged around 42-52  airplanes on a monthly basis for their 737 model. On other hand, COMAC manufactured a total of 46 of their regional jet ARJ21 model, the only model that acquired complete certification, in 5 years!

COMAC currently has the following models "on deck" (pun intended, sorry about that):

1. Narrow-body: ARJ21, C919;

2. Wide-body: C929 (still in development), C939 (proposed project);

   

   COMAC's ARJ21 delivered to Chengdu Airlines, by ChinaAviationDaily

So, narrow-body airplanes are good for short/medium-haul flights. Like the ones you usually see in the European Union being used by low-cost carriers like Ryanair or Easyjet. This type of aircraft is perfect for China's domestic market. For example, to travel between Beijing and Shanghai, a distance of about 1,100km or 2.5 hours.

Wide-body airplanes are mostly used in medium/long haul routes. Think about cross-continental or trans-oceanic flights made by carriers like Emirates or Qatar Airways.

The ARJ21, COMAC's only model currently in use by airlines had its maiden flight in 2008, several years behind schedule. In the end, it actually took 12 years for the ARJ21 to achieve CAAC's (the Chinese aviation regulator) flying certification. Its first delivery was made to Chengdu Airlines, based out of China's southwest province of Sichuan. An added point I must mention though is that COMAC is a partial owner of this company.

COMAC's difficulties in production numbers are due to several factors:

1- Shortage of human capital in terms of aerospace industry technicians;

2- Dependence on foreign expertise, parts, and design;

3- Research and development resources split into different aircraft types at the same time;

The C919 model hailed as a possible competitor to the Airbus 320 and Boeing 737 in China, has received already 815 intent orders from domestic airlines and aircraft leasing firms. Its first formal order was actually made this month by China Eastern (based out of Shanghai) for 5 airplanes to be delivered in 2021, dependent on the C919 model acquiring domestic flight certification. 

The C919 is considered a homegrown aircraft but its components still come mostly from abroad. Sort of a reverse version of a situation when you see local souvenirs in a shop in Europe, and at the bottom, you see "Made in China".

C919's components and its origins by ExtremeTech

Another issue lies as well in terms of that certification mentioned before, even if the CAAC issues it for this model, it will still have to be certified by the European Union's (EASA) or American (FAA) bodies, as the Chinese regulator does not currently have a bilateral agreement with any of them. In a few words, it means that the C919 model would have to wait even further to go global.

Finally, to add salt to the injury, one of the Trump administration’s goodbye "gifts" was to add COMAC to the US's blacklist of "Communist Chinese military companies" in January of this year due to its connection with the People's Liberation Army. This means that American investors and companies cannot invest in the Chinese manufacturer. 

60% of the suppliers used for COMAC's C919 model are American companies. This is ultimately risky from the US side as COMAC is not a real competitor since it is completely funded by the Chinese government, and the act might result in further trading-related retaliations. This would ultimately hurt the United State's economy more than anything else.

Chances for success

Should we write off COMAC from the map? Not at all. One important factor to have in mind is that it is a governmental project that is strategically important for China's ultimate goal to become a hub for aeroespacial technology. If China can land probes on the moon, it definitely has the capabilities to establish a third player to compete with the likes of Airbus and Boeing.

Several research centers were established across the country. Also, COMAC's workforce grew from 2,800 to 11,000 in 10 years. Also according to an analysis made by FlightGlobal:

"Comac says it has strung together a domestic and international aerospace supply chain comprising over 200 companies, 36 universities and millions of industry staff. It is also proud of the growth it has brought to Shanghai's commercial aerospace sector, quoting statistics that total output value grew more than six times to CNY7.96 billion ($1.28 billion) in 2015, from 2007, before the state-owned enterprise was launched. "

In 2019 COMAC partnered with ZTE to enable 5G in-flight internet connection and, one day after it was added to the US's blacklist, it was reported that China's three biggest airlines (state-owned) have put off the delivery of 100+ aircrafts from Boeing and Airbus, in favor of keeping their orders from COMAC. This was made to show their support for the homegrown manufacturer during the COVID-19 pandemic. If the government wishes so, it can use domestic airlines to boost the growth of COMAC, even if those same airlines would probably prefer the more efficient models from western companies.

Conclusion

So after all that, is China's airplane manufacturer currently an innovator? Certainly not. Is it a start in a complex industry? Yes!

I am of the opinion that the ARJ21, the C919, and even the C929 were never meant to be innovative, or ground-breaking. These models were touted as competitors to aircrafts from Boieng and Airbus, but this was just fanfare. As it usually happens with Chinese state-owned enterprises, foundations are laid firstly, and then, depending on the results, there is either a pivot or an astronomical growth.

China's aerospace technology is still catching up with projects developed 20 years ago in the West. It leveraged its huge domestic market correctly in order to acquire expertise from different foreign manufacturers but it is not like they bought or simply copied their technology. After all, the designs and technologies used for more complex components are closely protected by the companies that developed them.

Even if COMAC managed to acquire the currently most advanced designs and technical procedures, it would still fail due to its lack of in-house experts capable of efficiently using them. For now China's aircraft manufacturer is still learning how to make jetliners, while Western counterparts are planning to have hydrogen powered aircrafts in 15 years.

A lot of funding went to COMAC without showing results so far (around $45 billion). One cannot forget though that the majority of Chinese domestic routes are relatively short to medium routes (400 to 2,000km) and focused on the triangle made by the hubs of Beijing-Shanghai-Guangzhou. This is good for the Chinese manufacturer as it was, so far, able to successfully have 2 models that are optimal for these types of routes.

If COMAC focuses its efforts on the development of the aircraft types that are efficient for short to medium distances (like the C919 model if it manages to receive flight certification), and if the central government continues to provide preferential treatment to this still young enterprise, it might just have a shot to succeed in the coming decades due to the sheer size of the Chinese domestic market. And then, who knows, maybe it will continuously expand and become the number one aircraft manufacturer. We will have to follow COMAC's growth for years to come.

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My name is Jorge and China Abridged is where I write weekly about Chinese technology and society. I have a B.A in Asian Studies with the University of Lisbon, won a scholarship from the Confucius Institute for academic excellence, and lived for 2 years in the Middle Kingdom.

For the past 4 years, I have been involved with one of the biggest fintech startups in the world and now I spend my time honing my language skills, perusing articles about 中国, and perfecting my RSS feed.

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