Semafor Signals
What do Boeing’s troubles mean for China’s Comac?
Insights from Forbes, Nikkei, and the Eurasian System Science Research Association
The News
As Boeing’s global reputation hits choppy waters over manufacturing problems with its 737 Max, aviation enthusiasts are asking whether China’s state-backed aerospace manufacturer Comac could stand to benefit.
Last year saw the first commercial flight of Comac’s much-anticipated C919 aircraft — which the Chinese aviation industry hopes can eventually compete with the Boeing-Airbus duopoly as a cheaper alternative to the 737 and A320.
But obstacles remain for Comac to achieve its ambitious plans, with production hurdles that need to be ironed out before it can compete for a share of the skies.
SIGNALS
Some see Boeing as being in ‘last-chance saloon,’ while others say airplane maker will weather the storm
Boeing is “in the last chance saloon” owing to its manufacturing problems, the head of Emirates Airlines, one of Boeing’s largest customers, told the Financial Times, saying he planned to send his own engineers to observe production processes at the airplane maker. Rumors of CEO David Calhoun’s dismissal from the company are already circulating, a move that would show Boeing is “willing to take big-league measures,” an aerospace expert wrote in Forbes. But despite the company’s reputation being on the line, many analysts believe Boeing will weather the storm. Ryanair — one of the largest operators of the 737 — has already offered to take over the orders of customers who have walked away from the 737 MAX. And Boeing has a sophisticated crisis management team that helped the company reach record sales even after two deadly 737 MAX crashes in 2019 and 2020. And as troubles at other major corporations have shown, “even the worst of crises can eventually become artifacts of the past,” one public relations executive wrote for The Messenger.
Comac is getting publicity from the Boeing backlash, but it’s unlikely to take over anytime soon
Comac is a player “to watch out for,” but its C919 jet is years away from posing a threat to Boeing’s 737 dominance, one aviation analyst told the South China Morning Post. The aviation company – which was spun out from China’s military and founded in 2008 – faces numerous hurdles in expanding its footprint beyond China: in addition to the C919 plane still lacking air-worthy certification from European and American agencies, the company relies heavily on overseas manufacturers for engines and other parts, which means geopolitical tensions and trade barriers can put production at risk, Nikkei reported. The company also remains on a Trump-era sanctions list against Chinese companies.
Indonesia will be key to determining Comac’s future
Comac has said it will not rush production of the C919 and will first work on securing overseas certification for the aircraft – with its ARJ21 regional aircraft seen as key to its success in the meantime. Indonesia is so far the only country outside of China operating the ARJ21, and more Indonesian airlines taking orders of the aircraft will be crucial to Comac’s success, according to the Eurasian System Science Research Association, a China-based independent research consortium.
The archipelago country is seen as an ideal location for the ARJ21, with its aviation market favoring smaller, cheaper planes built for short island-to-island trips. Domestic air traffic in Indonesia exceeded 130 million passengers last year, and 2024 will be a “critical year” for Comac to enhance its international reputation in Southeast Asia, which could eventually convince other countries such as Vietnam and Malaysia to choose Comac over Boeing and Airbus, the research consortium argued.
