Boeing CEO Dave Calhoun addressed the recent maiden commercial flight of China’s C919 narrowbody jet, downplaying speculation about its impact on the duopoly held by Boeing and Airbus. Calhoun acknowledged the C919 as a “good airplane” but emphasized that it will take time for manufacturer COMAC to scale up production capacity to meet Chinese airlines’ demand. He suggested that having three providers in the global market should not be seen as a significant concern.
Calhoun urged Boeing to focus on existing competition and position itself to excel in the technology race. While China remains an important customer for Boeing, he acknowledged that geopolitical tensions could impact business proceedings. Chinese airlines have resumed using the 737 MAX, but deliveries have faced delays due to US-China friction.
Déjà Vu?
The attitude of Boeing’s CEO towards China’s C919 is reminiscent of McDonnell Douglas and Boeing dismissing Europe’s Airbus as an upstart and not a threat to their global duopoly in the late 1970s and early 1980s.
Airbus was able to attract customers with its newer and technologically advanced aircraft offerings, while McDonnell Douglas struggled to keep up. Airbus’s ability to offer a wider range of aircraft options, including larger wide-body models, gave it a competitive edge over McDonnell Douglas, which primarily focused on smaller narrow-body aircraft.
Furthermore, Airbus benefited from significant financial support from European governments, just like the C919 with Chin’s support, which helped it invest in research, development, and marketing. McDonnell Douglas, on the other hand, did not receive comparable government support, which put it at a disadvantage.
Airbus’s emergence as a strong competitor in the commercial aircraft industry did contribute to the decline of McDonnell Douglas. In an effort to compete with Airbus, McDonnell Douglas merged with Boeing in 1997. While Airbus’s rise in the commercial aircraft market played a role in McDonnell Douglas’s decline, it is important to note that it was a combination of factors that led to the ultimate demise of the company.
China’s C919
China’s C919 aircraft, developed by the Commercial Aircraft Corporation of China (COMAC), has the potential to challenge Boeing and other aircraft manufacturers in several ways:
- The C919 aims to capture a significant portion of this market, it is designed to cater to the specific requirements of the Chinese market. Chinese airlines may prefer to support a domestically-produced aircraft like the C919.
- The C919 is positioned as a cost-effective alternative to Boeing’s 737 Max and Airbus’ A320neo. As the aircraft is manufactured in China, it may benefit from lower production costs, which could be passed on to customers in the form of competitive pricing. This price advantage may attract buyers, particularly in emerging markets or price-sensitive regions.
- The Chinese government has shown strong support for the development and promotion of the C919, focusing on developing advanced technologies and improving manufacturing capabilities.
- The C919 incorporates some advanced features, such as fly-by-wire controls and composite materials, which align with industry trends. Continued advancements in technology and manufacturing expertise could enable China to further enhance the competitiveness of the C919 in terms of performance and efficiency.
However, it is important to note that challenging well-established manufacturers like Boeing is a complex task. Boeing and Airbus have long-standing relationships with airlines, established supply chains, and a strong track record in terms of safety, reliability, and customer support. Building trust and gaining market acceptance will be crucial for the C919’s success, along with continued improvements in areas such as performance, reliability, and after-sales service.
Airbus A220-500 Launch
Regarding Airbus potentially launching a stretched version of its A220 to challenge Boeing’s 737 MAX 8, Calhoun expressed confidence, stating that it does not worry him. He emphasized that Boeing’s priority is not regaining a specific market share percentage but rather addressing issues that have hampered aircraft deliveries in recent years, including the MAX crisis, supply chain complications, and production challenges.
Calhoun dismissed speculation about Boeing re-acquiring Spirit AeroSystems, a company that produces major aircraft structures for both Boeing and Airbus. While acknowledging disappointment with issues that have affected delivery rates, Calhoun stated that these problems are solvable without the need for acquiring another company.
The statements were made during a media tour at Boeing’s facilities in Charleston, South Carolina, ahead of the Paris Air Show. Calhoun’s remarks reflect Boeing’s confidence in overcoming challenges, maintaining competitiveness, and focusing on improving aircraft delivery performance.
