Much news recently on China’s plans to go into commercial jet plane production. Two reasons why I have not posted on this until now. One, I almost never bother posting on what is purportedly going to happen; there is plenty to post about on what is happening. Second, I did not take this news seriously.
But that is exactly why I am posting now.
Seems the Wall Street Journal and I think alike. Yesterday’s Journal has an article written by Bruce Stanley (out of Hong Kong) and Andrew Batson (in Beijing), entitled, China’s Air Ambitions Face Obstacles: Beijing Hopes to Tap Lucrative Market Dominated by Boeing and Airbus, expressing strong doubts as well:
Some aviation-industry executives argue that marshaling the necessary resources to build serviceable passenger jets is only part of the challenge, with some saying the effort could take longer than China expects. They say that, beyond the significant technical hurdles, China will face challenges when it tries to market its unfamiliar planes to airlines, provide customer support and spare parts for them and secure approval to sell them abroad.
“They put a man into orbit. We know that takes a lot of interlinked technical competences,” says Martin Craigs, president of Aerospace Forum Asia, a business group of suppliers to the airline industry in Asia. “But it’s not just industrial engineering. It’s the finessing of the commercial with the technical and all the huge responsibilities of planning and certificating large commercial aircraft.”
There are doubts China will be able to keep up with the new composite aircraft coming out from Boeing and Airbus and because the planes almost certainly will require “Western avionics and engines,” there are even doubts regarding China’s cost advantage. Most importantly, there are concerns Chinese planes just will not sell:
Selling such planes without a track record or reputation for customer service and support won’t be easy. Chinese state-run airlines are semi-independent of the government and may not want to buy them. Foreign buyers could be even harder to find.
“The airlines are not picking a product — they’re getting married to a supplier for a long, long time,” said Mr. Craigs, who has worked as a marketing executive for several European aviation companies in China.
We here in Seattle like to joke about our friends over at the Lazy B, but the reality is that both Boeing and Airbus took a long long time to get where they are and this is not a business known for its shortcuts. China will not be a force in commercial airplanes by 2020 or even 2030. In the meantime though, it might be a clever way for it to angle for discounts.
What do you think?