A small Airbus, in a big market, assembled in China for China

The significance of the China market for airliners, and what it might mean for the future shape of Airbus and Boeing, was on display yesterday when an A319 for China Eastern rolled out of the Airbus Tianjin final assembly line.

It was the 200th such A320 family jet to be delivered from the Tianjin facility since June 2009. Even Airbus wasn’t sure how many of its single aisle jets are now in service with China’s airlines, putting that figure at more than 900 as of yesterday for 16 PRC carriers.

On current estimates, Boeing forecasts (as of September) that China will need 4340 single aisle jets with between 90-230 seats, in the 20 years to the end of 2033, for replacement and expansion, whether they are made by itself, Airbus, Bombardier, Embraer or China’s own COMAC enterprise.  The Airbus forecast is similar.

The big two, Airbus and Boeing, basically approach the opportunities in China in the opposite direction to each other, even if they agree on the size of the bounty.

Airbus sends substantial parts of its jets to China, for final assembly. Boeing makes important parts of its jets in China (and elsewhere) for completion in the US.  Neither can produce enough jets to satisfy projected demand in China, in fact, it is questionable as to whether they could produce half of that many airliners if their market forecasts for other parts of the world are correct. As they usually are, when reviewing forecast and actual demand over the previous two decades, although neither fully identified what was happening in Asia.

Enter at this stage the COMAC c919. This is often given a somewhat patronising reception in the west. Which is a mistake. This time around China’s approach involves the parallel use of the key components and systems of western and eastern origin, all brought together in a single aisle jet which appears to sit midway between a Boeing 737-700 and -800, or an A319 and A320.

The difference is the range/payload optimisation. This is a rather short range jet compared to the Airbus and Boeing line-ups, but perfect in scope for the hundreds of secondary and tertiary city pairs emerging within China and to its nearest neighbours.

It is thus sensible to see the Tianjin milestone for what it is, a key part of a much broader plan to secure the technology and capacity China needs for its future from external and internal sources in a timely manner.

If Airbus continues to outsell Boeing 6:4 in the middle to higher capacity part of the single aisle market, 2400 of those forecast for China will be Airbus models. If Tianjin starts exporting finished A320s then 3000 or more such jets could be from the A320 family.

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