Economic Daily: How Domestic Large Aircrafts Can Generate Big Business Opportunities
Recently, two pieces of news about China's aviation market are eye-catching. First, China Eastern Airlines has launched its third C919, and the commercial operation of domestically produced large aircraft is steadily moving toward scale; second, according to Airbus' latest forecast, China will surpass more mature markets such as Europe and North America in the next 20 years and become the world's largest Aviation services market.
What is the future of China's large aircraft? In the next 20 years, can we rely on China, the world's largest market, to fly into the vast world?
In the first year since the C919 was officially put into commercial operation, the "first year show" of the domestically produced large aircraft can be said to have a solid start and a promising future. On May 28 this year, the C919 purchased by China Eastern Airlines from COMAC made its first commercial flight; on August 4, the second C919 passenger aircraft was put into commercial operation. As of October 16, China Eastern Airlines' two C919s had flown safely for a total of 1,695.48 hours, including 1,079.02 hours of commercial operation. They had carried out a total of 368 commercial flights, with an average passenger load factor of over 75%, and carried more than 45,000 passengers. Judging from various operational data, the C919's operating technical status is normal and its safe flight performance is good. Passengers left positive comments about the C919 flights such as "good meals", "smooth flight", "good flight attendant service" and "comfortable seats". This prompted China Eastern Airlines to increase its orders. On September 28, China Eastern Airlines signed a purchase agreement with COMAC again on the basis of signing the first batch of 5 C919s in 2021, ordering an additional 100 aircraft. The total number of C919 orders previously signed has reached 1,061.
This does not mean that the future is smooth. The international aviation market has long been monopolized by the two major aircraft manufacturing giants of the United States, Boeing and Airbus of Europe. There is resistance to COMAC's attempt to seize a considerable market share from the two market giants by relying on domestically produced large aircraft. For example, "China will become the world's largest aviation market" is an international consensus, and the American Boeing Company has also issued a report making similar predictions. Both Airbus and Boeing have expressed their appetite for the trillion-yuan pie in China's emerging aviation market. Although COMAC, a latecomer, has the advantage of home field, it is still a weak challenger and should not be taken lightly.
How can China's large aircraft fly to create big business opportunities?
To strengthen the internal strength, the roots will be deep so that the leaves will flourish. C919 is based on independent technology research and development and adopts the "main manufacturer + supplier" model to control the project leadership, with a localization rate of approximately 60%. In the field of civil aviation, the localization rate is not low. However, it should be noted that the engine of the C919 is provided by CFM, a joint venture between the United States and France. There are certain risks, and the pace of "domestic replacement" needs to be accelerated. In addition, compared with the full orders, C919 production capacity is quite insufficient. Increasing production capacity as soon as possible is the key to seizing the current development opportunities.
If you want to build a long line, Nugget Airlines serves it. Large aircraft drive a long industrial chain. In addition to aircraft manufacturing, the market for subsequent operation and maintenance is also considerable. Airbus predicts that if aviation services are divided into three categories: maintenance, training and operations, and optimization and upgrading, the maintenance field will be the largest market in the next 20 years, accounting for more than 80% of the aviation service market; the training and operations field is future-oriented. By 2042, The world is expected to need 2.2 million pilots, technicians and cabin crew; optimization and upgrading have the highest growth rate among the three fields, with a compound annual growth rate of 5.1%. From the perspective of the domestic civil aviation market, the current aircraft are basically from Boeing and Airbus. In addition to the heavy investment in purchasing the aircraft, we also rely heavily on foreign countries for daily operation and maintenance. If we win this market ourselves, there will be a lot of room for gold nuggets in the future.
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We must emphasize cooperation and openness to win the future. Civil aviation is one of the fields with a high degree of openness and the deepest international cooperation. Although the world's civil aircraft are mainly monopolized by Europe and the United States, the operation of aircraft cannot be separated from the policy support of various countries and regions, so international cooperation in the aviation industry has become inevitable. To achieve great development, domestically produced aircraft must not only rely on the domestic market. They must also strengthen international cooperation in aircraft sales and operations, just like aircraft manufacturing, and continuously expand their circle of friends to achieve win-win, multi-win and win-win results.
The "Long March" has just taken the first step, and there is still a long way to go to become a civil aviation power. It is expected that domestically produced large aircraft will accelerate breakthroughs in independent innovation, achieve large-scale and serial development, and fly into a wonderful future in the vast world. (Economic Daily | Author She Huimin)