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Behind the truce between Airbus and Boeing is a common competitor: China – EURACTIV.com

When the United States and Europe started a 17-year trade war on Boeing and Airbus subsidies, China invested a lot of money in its own commercial aircraft to deal with the duopoly of Western aviation.

Last week, the United States and Europe jointly threatened to end their dispute. The two sides signed a five-year truce to suspend tit-for-tat tariffs.

During his visit to Brussels on Tuesday (June 15), US President Joe Biden made it clear that Washington and Brussels must “jointly challenge and counter China’s non-market behavior in this field, which has given Chinese companies an unfair advantage.” .

In the past four years, the state-owned manufacturer Commercial Aircraft Corporation of China (COMAC) has conducted test flights for its 168-seat narrow-body C919 aircraft, which is a potential competitor to Airbus A320 and Boeing B737.

COMAC expects to obtain the airworthiness certification from the Chinese Air Traffic Regulatory Authority this year, which coincides with the 100th anniversary of the founding of the Communist Party of China.

Scott Kennedy, a senior adviser at the Center for Strategic and International Studies in Washington, said the aircraft received US$4.9 to 72 billion in state subsidies, far exceeding the assistance provided by the Airbus and Boeing governments.

“The real problem is that China is manipulating the market, making Airbus and Boeing compete with each other and requiring technology transfer as a condition of the order,” said Richard Aboulafia, an aviation expert at the Teal Group, a Virginia market analysis company.

China’s air traffic has recovered much faster than the rest of the world because the country brought the coronavirus outbreak under relative control much earlier than other countries last year.

Boeing believes that the Chinese market will need 9,360 aircraft in the next 20 years, accounting for one-fifth of the world’s total.

This may be a big windfall for the A320 and 737 MAX, although China has not yet approved the return of the Boeing aircraft, which was grounded in the United States for 20 months after two fatal crashes.

“Diplomatic and Commercial Tools”

Although China still relies on Airbus and Boeing aircraft, China’s ambition to have its own fleet is obvious.

“The aviation industry is both a growth tool and a diplomatic and commercial tool that enables them to formulate a very comprehensive foreign policy in foreign markets,” said Michel Merluzeau, an analyst at industry consulting firm AIR.

“The Chinese have the technology and industrial skills to make airplanes, there is no doubt about that,” he told AFP.

“The Chinese are very ambitious. They make a lot of sense. They know it will take time,” he said. “They don’t want to compete with Airbus and Boeing in 2025.”

C919 was built with the help of the United States and Europe. According to Kennedy, only 14 of the aircraft’s 82 suppliers are Chinese.

The wings and fuselage are made in China, but Chinese manufacturers have not yet mastered the skills to make engines or aircraft electronic equipment.

Aboulafia said: “They are preparing their own industry to meet domestic demand, which will be inferior products, but at least nationally.”

This aircraft is heavier than the aircraft in the United States and Europe, so it is less fuel efficient and therefore more expensive to operate.

From Duopoly to “Triple Monopoly”

But COMAC is attracting customers.

The company said it had 815 orders from 28 customers, most of which came from Chinese airlines-although few confirmed orders.

China Eastern Airlines is the first company to place a firm order for 5 aircraft in March.

Huang Jun, a professor at the School of Aeronautics and Astronautics, Beijing University of Aeronautics and Astronautics, said that C919 will not change the rules of the game.

But it may be cheaper than its competitors and form an “ABC model” in China, where Airbus, Boeing and COMAC operate.

“We just hope that we can join this market and occupy a certain market share,” Huang said.

For Airbus Chief Executive Guillaume Fury, COMAC “will gradually become a decent participant.”

He said: “Therefore, by the end of this century, we may develop from a duopoly of single-aisle aircraft to a’triple monopoly’.”

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