The Chinese are again talking today about designing and building a 737/A320-sized narrow-bodied airliner to compete with Boeing’s and Airbus’ offerings. According to the latest report, the Chinese plan to fly the first prototype in 2010 and put it into commercial service shortly after.
Should American and European planemakers be afraid of a new, low-cost competitor?
Yes and no.
* The Chinese may have the technical ability to design and build a new airliner.They are currently beginning to produce a regional jetliner called the ARJ21 that greatly resembles in size and design the former Douglas DC-9: three and two seating, two rear-mounted engines, the same 78-105-seat size. (The new plane they talked about today would be larger than the ARJ21.)
* The Chinese also built a number of McDonnell-Douglas MD-80 jetliners more 15 years ago under contract with the St. Louis-based company.
* Airbus is setting up an assembly line for its A320 jetliners in China.
* Chinese companies build major subassemblies for both Boeing and Airbus jets.
* Their own growing internal market is huge with the need for more than 2,400 airliners in the next few years.
* The Chinese, like Boeing and Airbus, rely on Western companies for such sophisticated parts such as the engines, avionics, landing gear and so forth.
* Their several previous attempts to build and market Chinese-built commercial aircraft have foundered.The MD-80 program stumbled because of production problems
* The ARJ21 has yet to generate orders outside China.
* Their design-build timetable, 3-years, seems wildly optimistic by Western standards. Even with accelerated design schedules, it typically takes about 6 years for Boeing or Airbus to create and bring to market a new airliner.
* Other countries have succeeded in producing technically competent commercial aircraft, but have failed to produce a commercially successful airliner. Russia and its former republics produced a whole
cafeteria of airliner choices but their sales are measured in handfuls a year. The Dutch, Swedes and British once produced airliners for commercial service and sold them in fair numbers. None of these countries remains a significant factor in the airline business.
In the end, becoming a big factor in the airliner business is more than having a technically-viable product. It’s a matter of reputation, sales, service and relationships created over decades.
But if the Chinese even succeed in tapping their own internal market as a beginning step, they pose a significant business threat to Boeing and Airbus, which are counting on the Chinese market for the a big piece of business.