Boeing’s safety problems and Airbus’s drive to ramp up production should have left a gap for smaller rivals to challenge their dominance of the commercial jet market.
But the US and European giants face little near-term threat to locking in the medium- and long-range jet markets, industry experts say, as the barriers to entry are too high for China’s COMAC or Brazil’s Embraer.
COMAC didn’t bother to bring its new C919, its first entry into the entry-level medium-range single-aisle class, to this week’s Farnborough Air Show, the premier gathering of the European aviation industry.
Meanwhile, Airbus and Boeing added more than 260 planes to their massive order books of nearly 15,000 aircraft.
That’s despite the fact that an airline ordering a medium-range Airbus A320 or Boeing 737 MAX today would likely have to wait until the end of the decade to take delivery of the plane. Both companies are facing supply chain and other problems that have hampered efforts to boost production.
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Over the next two decades, airlines will need an estimated 42,000 new aircraft to renew their fleets with models that use less fuel and emit less CO2, as well as to meet the expected doubling of global air traffic.
“A significant narrow-body shortfall remains through 2028 for the A320 family and more so for the 737 MAX,” said Richard Evans, an analyst at aviation industry data firm Cirium.
Narrow-body or single-aisle aircraft are the powerhouses of the commercial airline industry, each carrying between 175 and 250 passengers on medium-haul flights.
Despite the opening in the most popular commercial aircraft category, it will not be easy for COMAC or Embraer to take advantage of the opportunity.
Certification hurdle for COMAC
COMAC’s C919 began commercial flights in China. A state-owned company, COMAC has nearly 1,200 orders for the jet, almost exclusively from Chinese airlines.
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Beijing wanted the plane to reduce China’s dependence on foreign technology and gain ground in the global aircraft market. However, the plane has so far only been certified for use in China and production remains low-scale.
Without certification from the United States’ Federal Aviation Administration and the European Union’s Aviation Safety Agency (EASA), the two major markets remain closed to the C919.
“Chinese airlines are the target market for the C919,” said Pascal Fabre, aerospace industry expert at AlixPartners.
He said there were too many obstacles, including political ones, for major Western airlines to add it to their fleets.
COMAC sent a C919 to the Singapore Air Show in February. The company’s small stand in Farnborough displayed only small models of the jet.
Airbus and Boeing still expect COMAC to become a rival.
“We see COMAC as a serious competitor,” said Christian Scherer, head of Airbus’ commercial aircraft division.
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But not immediately, as they believe the C919 offers airlines nothing new compared to Airbus and Boeing aircraft.
“There is no differentiation, there is no new value being brought to the market, which tells you that COMAC is really trying to enter a market that remains heavily influenced by Airbus and Boeing,” he added.
Developing technologies for the next generation of aircraft, led by Airbus and Boeing, are “high barriers to entry,” Scherer said.
Huge development costs
Brazil’s Embraer is already an established player in the smaller, regional aircraft market.
For Fabre at AlixPartners, Embraer has the technical know-how to develop a medium-range plane that could compete with Airbus and Boeing.
The problem is money.
“The capitalization of the company is about five billion dollars. The development of a new commercial aircraft, even for Embraer, is at least that level, so partnerships are needed,” said Fabre.
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The risk of a company extending itself by developing an aircraft is real.
Canada’s Bombardier developed the C-series jets to occupy the space between small regional jets and the Airbus A320 and Boeing 737 planes. It began operations in 2016, but the company was unable to cope with financial pressures and was split, with Airbus acquiring the plane which was rechristened the A220.
Embraer, which makes the E2 which is just smaller than the A220, had been in talks with Boeing to sell its commercial jet business, but the US company pulled out in 2020 during the Covid pandemic.
Since then Embraer prefers to improve its existing aircraft.
“It takes seven, eight years to launch an aircraft. And we have to manage this technology transition” to more sustainable fuels, the company’s chief executive Gomes Neto recently told the trade magazine Aviation Week.
“We don’t want to put the company at risk.”
Source: AFP