China’s Comac reliant on ‘captive domestic market’ for sales

When China’s ruling Communist Party released its 14th five-year plan in 2021, chief among its aims was “self-reliance in science and technology as a strategic underpinning for national development”. But a year later, experts say the continued wait for delivery of the single-aisle C919, China’s first passenger jet, is a reminder that the country’s civil aviation industry is “decades” behind the west and remains heavily dependent on western suppliers. “The jury is still out on whether China can develop an internationally recognised and successful aerospace industry,” says Sash Tusa, aerospace and defence analyst at research firm Agency Partners. The C919 was due at the end of last year. No date for delivery has been set though in May the first test flight of an aircraft that is set to be delivered was completed. The jet is being developed by the Commercial Aircraft Corporation of China (Comac), a state-backed group spun out from China’s military. China is set to become the world’s largest market for air travel and has 248 operational airports, according to the Centre for Aviation. It is now one of the two most important markets for the two global aviation giants Boeing and Airbus. Boeing forecasts that one in every five commercial aeroplanes ordered between 2021 and 2040 will be for customers in China. At the start of this month, Airbus announced a deal with four Chinese airlines for 292 single-aisle A320 aircraft, which carry a ticket value of $37bn. But according to Jim Harris, who leads the aerospace and defence practice at Bain & Company, Comac will end the Boeing-Airbus duopoly in China for large commercial aircraft before 2040. “The Chinese government is willing to invest tens of billions of dollars to achieve this strategic outcome, and China provides a large captive domestic market in which Beijing can mandate orders for Comac even if the C919 is less competitive than western alternatives,” he says.<br/>