Welcome to my latest video presentation, posted Friday, November 29. The accompanying article is an edited transcript. For additional details and several charts, watch my video.
Geopolitical rivalries are expected to increase in 2025 on many fronts and the aviation industry is no exception.
The globe’s two leading aircraft manufacturers, Boeing and Airbus, face a tough competitor in China’s Commercial Aircraft Corporation of China (COMAC), the first China-based domestic manufacturer of passenger aircraft. China is the world’s most valuable single-country aircraft market, and COMAC has the home advantage.
China is the globe’s number one market for aircraft, worth an estimated $1 trillion over the next 20 years. The entire Asia-Pacific region, one of the fastest-growing regions in the world, is valued at more than $2.3 trillion.
As global economic growth accelerates, the fastest growth will occur in the Asia Pacific, home to an expanding middle class that has an increasing appetite for Western amenities, such as tourism and travel.
The COMAC C919 is China’s pioneering, domestically produced passenger airliner. The C919 medium-range jet was launched in 2008 as China’s challenger to the Airbus A320neo and Boeing 737 MAX.
The C919 has a realistic chance of stealing market share from the A320neo and 737 MAX. The C919 has taken 15 years to reach commercial deployment, with China Eastern Airlines in May 2023.
The first of COMAC’s smaller jets, the ARJ21, was rolled out as a prototype in 2007 and made its maiden flight in 2008 from Shanghai. It was introduced in 2016 by Chengdu Airlines. The ARJ21 also is currently flown by Air China and China Southern Airlines.
In 2024, COMAC said its ARJ21 will be dubbed the C909, in keeping with the C919’s nomenclature.
As of November 2024, COMAC’s active fleet includes a small number of operational aircraft. The most prominent model is the ARJ21/C909, with roughly 100 units delivered, primarily serving Chinese airlines.
The C919, COMAC’s more advanced narrowbody jet, remains in its early stages of deployment, with only a handful of deliveries completed, notably to China Eastern Airlines. Despite this, the company has a substantial backlog of orders, indicating significant future growth potential.
COMAC’s two commercial passenger plane models are, with the exception of one Indonesian airline, all flown within China. The state-owned company has embarked on an aggressive expansion strategy at a time when Airbus and Boeing are struggling to make aircraft quickly enough to meet burgeoning demand.
COMAC represents a significant challenge to the long-standing Airbus-Boeing duopoly in the global aviation industry. COMAC’s emergence is not merely a commercial endeavor; it reflects Beijing’s strategic priorities, including national security and technological self-reliance.
With the introduction of its C919 narrowbody jet, COMAC is positioning itself as a viable competitor in a market historically dominated by Western aerospace giants.
For Beijing, COMAC’s success is more than just a commercial achievement—it’s a matter of national pride and geopolitical strategy. Aerospace is seen as a critical sector for national security, given its dual-use potential in both civilian and military applications.
By cultivating a domestic aerospace industry, China aims to reduce dependence on Western suppliers, especially as tensions with the West escalate over trade, technology, and political issues. COMAC’s development is heavily subsidized by the Chinese government, allowing it to compete on pricing while securing domestic orders from state-owned airlines.
But therein lies the rub. The C919 is heavily reliant on Western technology. The incoming Trump administration has vowed to launch a trade war, especially with China. COMAC would be in dire straits if the U.S. and Europe were to turn off the technology spigot. It takes decades and considerable technological know-how to build a major domestic aircraft manufacturer from scratch. The success of COMAC is hardly assured.
That said, COMAC’s expansion is a direct threat to Airbus and Boeing, particularly in the lucrative narrowbody jet market, which accounts for a significant portion of global aircraft demand. The C919 has already secured hundreds of orders, predominantly from Chinese carriers.
The timing of COMAC’s rise could not be worse for Boeing. Under CEO Kelly Ortberg, the company has struggled to implement cultural reforms necessary to restore its reputation and operational efficiency following the 737 MAX crisis.
COMAC’s growing market share will force Airbus and Boeing to reconsider their strategies, especially as airlines seek to diversify their fleets and reduce reliance on Western manufacturers. The Red Dragon will be an aviation force to reckon with in 2025 and beyond.
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