Boeing, Airbus in dogfight over China
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.” –