Boeing And Airbus Face $223B Plane Sales Loss In 20 Years

Ivan Tang profile picture
Ivan Tang
445 Followers

Summary

  • China’s first narrow-body passenger airplane C919 has completed the final phase of test before its maiden flight scheduled next month. It expects to enter commercial service in 2019.
  • C919 aims to take a third of Chinese narrow-body market and a fifth of global market by 2035. That means a global sales target of 5,626 units. The low end.
  • In view of production restraints, COMAC, the maker of C919, can make and sell up to 2,500 C919s in 20 years, at the expense of Boeing B737 and Airbus A320.
  • With the $89.1 million list price for each B737-800, the sales of 2,500 C919s in next two decades means the duopoly will lose sales of $223 billion.

Boeing (NYSE:BA) and Airbus (OTCPK:EADSY) may lose sales of at least 2,500 narrow- body passenger jets with a total list value of $223 billion in the next 20 years to a new Chinese challenger. Armed with low price and strong domestic demand, Chinese new narrow-body plane C919 has finished its last phase of technical test before its maiden flight scheduled next month. It is expected to enter service in 2019.

Made by Commercial Aircraft Corp. of China (COMAC), C919 started its first high speed taxiing test in Shanghai on April 16 and completed the fourth and the last test on April 23.

C919 Is Scheduled To Have Maiden Flight Next Month

The 158-seat C919 is scheduled to operate its maiden flight before end of May, according China's aviation supervision organ the Civil Aviation Administration of China (CAAC).

C919 has experienced several delays. It was originally scheduled to have its maiden flight in 2014 followed by a first delivery to Chengdu Airlines. However, the aircraft was not rolled out until November 2015 following program delays. COMAC said at the time it aimed for first flight in 2016.

The first C919 was produced in 2008 with a mixed cabin configuration of 158 seats and all-economy class of 168 seats.

Despite its repeated delays, the C919 has been well received by airlines and airplane leasing companies. By the end of 2016, it secured 570 orders from 23 Chinese and foreign customers. China Eastern will be the launch customer.

This number of orders should be considered in the context of China's airplane market potential. In view of China's fast expanding middle class and their rapidly rising appetite for traveling, Airbus raised its projection last November for China's airplane demand in the next 20 years (2016-2035) by 500 planes, to a total of 5,970 planes with a total

This article was written by

Ivan Tang profile picture
445 Followers
I am an experienced journalist focusing on multi-disciplinary analysis of China's economy and business. I graduated from the Chinese University of Hong Kong and got my MBA from l'Ecole Superieure de Commerce de Paris.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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