Boeing, Air­bus in dog­fight over China

The Myanmar Times - - Business -

AERO­SPACE gi­ants Boeing and Air­bus took ver­bal pot­shots at each other at the Zhuhai air show as the US and Euro­pean ri­vals seek to cap­ture more of China’s boom­ing air­craft mar­ket.

China is one of the West­ern man­u­fac­tur­ers’ key bat­tle­grounds, with its trav­ellers tak­ing to the skies in ever-grow­ing num­bers.

The coun­try’s air­lines will need nearly 6000 new planes worth US$945 bil­lion over the next two decades, Air­bus said in its 2016-2035 Global Mar­ket Fore­cast.

Boeing’s ex­pec­ta­tions are even more op­ti­mistic, for 6800 air­craft cost­ing US$1 tril­lion.

To win favour both have built part­ner­ships with Chi­nese firms.

Air­bus has a com­ple­tion and de­liv­ery cen­tre in Tian­jin, where work­ers in­stall fur­nish­ings and ap­ply paint to air­craft for the do­mes­tic mar­ket. It also buys parts such as exit doors, brake blades and wing sec­tions from Chi­nese sup­pli­ers.

Boeing is plan­ning to open a fa­cil­ity with the state-owned Com­mer­cial Air­craft Corp of China (COMAC) to paint and in­stall cab­ins for 737-model planes, the Chi­nese firm said.

Eric Chen, pres­i­dent of Air­bus China, dis­missed the Seat­tle firm’s plan as “close to one gen­er­a­tion” be­hind his own firm, say­ing it was fol­low­ing their strat­egy “with a lot of re­luc­tance”.

Dar­ren Hulst, manag­ing di­rec­tor for North­east Asia mar­ket­ing at Boeing said that the Air­bus A350 fell short of the 787 wide­body plane in range, ca­pac­ity, car­bon emis­sions, win­dow size and aero­dy­nam­ics.

“The 787 is ca­pa­ble and has tech­nol­ogy and fea­tures built into it that are not avail­able on the A350, which was ob­vi­ously in­tro­duced later into the mar­ket,” he said.

He added the com­pany had 14 China de­liv­er­ies of 787-9s in 2016 and had se­cured or­ders and com­mit­ments for 46 more.

While the two megafirms see a sunny fu­ture in China, home­grown com­peti­tors backed by Bei­jing aim to beat them at home and abroad.

Chi­nese au­thor­i­ties have urged com­pa­nies to ac­quire tech­nol­ogy and skills in a range of high-value sec­tors in­clud­ing aero­space in the “Made in China 2025” plan.

At the same time as it is work­ing with both Boeing and Air­bus, COMAC is de­vel­op­ing sin­gle-aisle jets to com­pete with them. Its C919 nar­row-body is go­ing up against the Boeing 737 and Air­bus A320 in the 160-seat seg­ment, which the Chi­nese com­pany pre­dicts will have more than 17,000 de­liv­er­ies over the next 20 years.

Like all for­eign firms with valu­able in­tel­lec­tual prop­erty op­er­at­ing in China, the aero­space gi­ants un­der­stand the risks of train­ing their fu­ture ri­vals, said Christopher Bald­ing, pro­fes­sor of eco­nomics at Pek­ing Univer­sity’s HSBC Busi­ness School.

But they are stuck be­tween a rock and a hard place, he added, be­cause share­hold­ers want them to fight for Chi­nese mar­ket share.

“Even if they don’t come to China, there’s a good chance that if they are do­ing any­thing in­no­va­tive it’s go­ing to get stolen any­way, so the only thing they are do­ing is harm­ing their rev­enue.” –

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