As we approach another month’s end, readers might the following information insightful. The story isn’t how well Airbus is delivering or how Boeing is managing to push MAXs out of Renton. We think the bigger story here is COMAC’s deliveries.
First, some perspective – Airbus and Boeing dominate commercial aviation. Together they have delivered over 92% of the airliners YTD. The chart illustrates how dominant the duopoly is.
How many people have COMAC at #5 OEM YTD for new deliveries? So far it is only the ARJ that is being delivered. The ARJ had a gestation that was inordinately long. Even though the aircraft looks suspiciously like an MD-95 or 717 knockoff.
Like UAC, COMAC has a “protected” domestic market. Whereas Russia’s market is now in the freezer for western OEMs and is likely to remain there for a long time. China’s market is open to western OEMs and Airbus is making deliveries. ARJ deliveries are tightly focused: four each to Air China and China Southern, plus one to Chengdu Airlines. These nine deliveries match the combined deliveries for De Havilland Canada and UAC.
The ARJ is a regional jet and with each delivery to a Chinese airline, there is one less opportunity for Embraer. COMAC stated it plans a production rate of 30 ARJs per year. The following table lists transactions for COMAC through August 2022. The pandemic slowed COMAC like any OEM. Even though China might be the most draconian nation regarding pandemic shutdowns, COMAC is likely to see an acceleration in deliveries.
The base is small, and it is growing. Though dwarfed by the more popular models, the ARJ is already the 10th most delivered aircraft model in China from 2017 through August this year with 49.
Embraer has done some deals, but Chinese airlines are almost certainly going to favor the ARJ because protecting a domestic OEM is a state priority. Embraer has expressed confidence because they expect Chinese demand to be ahead of COMAC’s production plan. That logic may hold because there is no Bombardier CRJ competitor and COMAC is not producing particularly high volumes. If regional flying accelerates in China, then CAAC may allow more Embraer orders. But COMACs ARJ will get preference.
Co-Founder AirInsight. My previous life includes stints at Shell South Africa, CIC Research, and PA Consulting. Got bitten by the aviation bug and ended up an Avgeek. Then the data bug got me, making me a curious Avgeek seeking data-driven logic. Also, I appreciate conversations with smart people from whom I learn so much. Summary: I am very fortunate to work with and converse with great people.