Why China is taking its aviation industry to the skies
Over fast few years China has dominated some of the commercial goods markets, both regionally and globally, by following a policy of flooding markets with volume and low cost items like electrical and computer appliances, cloths and pent. It is a common knowledge that the busts of various Indian deities, much in demand during the festive season, are normally made in China. But, now China is thinking really big and is moving beyond low-cost manufacturing sector.
Recently, China unveiled a 168-seater passenger aircraft which can travel up to the range of 5,555 kms. The first model from the production line of Comac C919 was rolled out in Shanghai on November 2. Their civil aviation chief has articulated their interests in aircraft production sector by mentioning that “a great nation must have its own large commercial aircraft".
The business of aviation is extremely complex. Glamour could be the face of this business but actually there are far too many intricacies associated. Safety is a major concern, be it an airliner or aircraft industry. The real challenge for aviation business is about the financial sustainability. The agencies involved in this business need to have capability to sustain for many years without earning profits. The business takes time to become cost-effective. Aircraft industries support aviation sector by building aircraft and ancillaries. Today, globally, only limited industries are involved in aircraft-making, owing to technological and financial challenges. Now China is planning to "disturb" this market.
The first test flight of C919 is expected to happen during 2016 and commercial service is likely to start by 2019. This aircraft has been designed and developed by the Chinese state owned company called the Commercial Aircraft Corporation of China, Ltd (Comac).
For Comac, a company which began its operations only seven years back with an initial investment of approximate USD 3 billion, this is a significant achievement. In the commercial aircraft building sector, China is keen to reduce their dependence on the western companies like Boeing and Airbus. Apart from reducing their dependence on these agencies, China is also aiming to finish the commercial duopoly of these agencies by making an attractive option available to the rest of the world. C919 is expected provide a tough fight to the models like the Airbus A320 and Boeing 737. Comac claims that they already have orders for 517 aircraft from 21 customers. Obviously, the bulk orders would come from the Chinese airlines.
The C919 project has some foreign dependence too. The aircraft's engines are made by CFM International, a joint venture between America's General Electric (GE) and France's Safran, while Honeywell has provided various parts for flight system. GE Aviation has provided avionics core processing systems and display system.
Presently, some forecasts (sponsored by Airbus and Boeing) are available about the future of civil aircraft market. It is estimated that within the next 20 years, China is expected to have requirement of approximately 6,000 new passenger aircrafts (say business of about USD 900 billion). It is expected that the global requirement could be for more than 30,000 aircraft during the same period. China understands that only C919 aircraft would not help them to attract the global customers. Comac is proposing to develop C929 and C939 as wide-body models which are expected to cater for around 300 and 400 passengers respectively. Chinese investment towards indigenous aircraft industry should also be viewed at the backdrop of their pet "One Belt One Road"/"Silk Road" initiative. "Air Silk Road" is an important element of this project. China is planning to invest approximately USD 32 billion in more than 50 aviation related projects under this initiative. China understands the need to accelerate their aero engine development project. For China, a successful aviation industry is about expanding their "global footprint" by using aviation as a tool.
China views aircraft industry as an important commercial activity and also as a tool to expand their geostrategic influence. Commercial aircraft could always come in the aid of military in case of national emergencies. By 2030-'35, China would have around 6,000 aircraft which could be used by their military for human and cargo traffic, if required.