China’s Comac wants to challenge Airbus and Boeing globally: Can it break their duopoly?

Comac is the state-owned aerospace manufacturer tasked with the endeavour. The majority of its customers are Chinese airlines. Comac is starting to burnish its reputation overseas by exporting the C909, a single-aisle jet used mainly on regional routes, to markets in Southeast Asia. It’s an incremental step—by 2030, the Shanghai-based plane maker will still be a minnow next to industry giants Airbus and Boeing. But it will have begun to position itself as a credible challenger to the decades-long duopoly.

That strategy was on display at the Singapore Airshow this week. Comac brought one of its flagship single-aisle C919 planes, which can seat up to 192, as well as two of the C909, with space for 97. I was given a tour of one of the latter by Leo Budiman, vice-chairman of PT TransNusa Aviation Mandiri, an Indonesian airline that was Comac’s first foreign customer.

Demand for air travel has fully recovered from pandemic lows, but the supply chains underpinning manufacturing have not. The ongoing trade war is worsening the situation, with China cutting off access last year to rare earths widely used in aircraft electronic systems and jet engines. Airbus and Boeing are trying to increase production to meet demand. The European plane maker reported 793 deliveries last year, while its American rival notched 600. Comac delivered only 15 C919 jets.

TransNusa, founded in 2005 offering charter flights across the archipelago, was grounded during the pandemic. Its prospects were revitalized in early 2020 when China Aircraft Leasing Group Holdings. took an indirect 36% stake for $28 million and helped its strategic partner Comac broker its maiden overseas deal.

Though TransNusa’s fleet comprises more Airbus planes than Comacs, its three-year track record flying the C909 has provided a testing ground for the Chinese plane maker. Last year, Lao Airlines and VietJet Air began flying the model. Budiman said he was very satisfied with the regional jets and would love to order dozens of the larger C919 models that could potentially replace some of Airbus’ A320neo planes.

Comac needs time to shore up its reputation. For one, it simply doesn’t have the manufacturing capacity to go head to head with Boeing and Airbus. Its C919 deliveries were far short of its targets last year. More than 40% of the components of the C919 are imported and the US trade war last year cut off access to Western-developed engines for a time. In addition, none of Comac’s planes have been certified by US or European regulators. While this isn’t necessarily an issue for airlines flying within Asia, lack of Western certifications will hold back wider adoption.

European evaluators have begun testing the C919 in flight, according to the South China Morning Post, the third stage of the European Union Aviation Safety Agency’s four-part assessment process. The regulator said last April that it would need three to six years to certify the model.

That’s a setback for Comac, which was founded in 2008 by a number of government-owned companies and entities, and for China’s efforts to develop a homegrown aircraft industry that began in the 1970s. President Xi Jinping’s arrival on the scene as the most powerful leader since Mao Zedong has given those endeavours muscle and urgency. But they didn’t start with, nor will they end, with him.

Even without Western certification, Comac has a sizeable customer base at home. The company’s share of China’s market for new, narrow-body plane deliveries is expected to rise to 65% by 2030, according to Dan Taylor, head of consulting at IBA, an aviation market intelligence and advisory firm. That would translate to a less-impressive 7% of total fleet size in this category once existing models from the duopoly are included. So it’s understandable why Comac’s ambitions are grander.

In the annals of China’s industrial renaissance, there are only two areas in which it has failed to excel: semiconductors and commercial jetliners.

Advances in the first have been slow, but progress in the second is starting to bear fruit.When Comac was set up, the C919 was meant to become commercially available by 2016. That milestone was achieved seven years later, in 2023. Though it has taken longer than expected, it’s just a matter of time before Comac becomes a viable competitor in global aviation—though it must overcome considerable turbulence along the way. ©Bloomberg

The author is a columnist for Bloomberg Opinion’s Asia team, covering corporate strategy and management in the region.