Chinese jet: Airbus orders will divert to homegrown ‘patriot express’

Some people avoid buying a new model of car on the basis that it may be unreliable. But Chinese air passengers nevertheless clamoured for seats in the first commercial flight of the homegrown C919 airliner on Sunday. That augurs well for future sales of the jet. Beijing hopes it will challenge the duopoly of Airbus and Boeing.

It took the state-backed Commercial Aviation Corp of China 15 years to bring the 164-seater jet into service. China Eastern Airlines was the first buyer and is using the aircraft to fly between Beijing and Shanghai.

China has long needed an alternative to US manufacturer Boeing, which has close links to the US government. No Chinese airline has bought a Boeing commercial passenger plane for six years, reflecting escalating geopolitical tensions with Washington.

The narrow-bodied jets, however, fail a full self-sufficiency test. The C919 relies heavily on components made in Europe and the US, including engines and electronic equipment. Suppliers include French aviation group Safran and General Electric of the US.

Airbus should be worried, regardless. China’s unofficial boycott of Boeing means Chinese airlines have been putting in record orders for Airbus planes. Increasingly, they will order CACC aircraft instead.

State-backed China Eastern Airlines has a string of C919 deliveries set to arrive this year. CACC has a fat pipeline of local customer orders exceeding 1,200 jets. The company is not listed but is accessible to investors via its corporate bonds.

For now, the domestic market is more than enough for the C919. Strong travel demand from local passengers means Chinese carriers increased international capacity by more than a fifth this month.

Over the next two decades, China’s air traffic is expected to grow more than 5 per cent a year, 50 per cent faster than the global average. Chinese airlines will account for more than a fifth of the total world demand, according to Airbus estimates. As production capacity of the C919 grows, the Chinese sales of the Franco-German aviation giant will diminish.