China Faces Setback in Bid to Challenge Boeing, Airbus woth delivery of China’s first locally produced commercial jetliner delayed to 2017 at the earliest

August 6, 2013, 7:33 a.m. ET

China Faces Setback in Bid to Challenge Boeing, Airbus

State-Owned Comac to Delay Delivery of C919 Jet

JOANNE CHIU

HONG KONG—Delivery of China’s first locally produced commercial jetliner will likely be delayed to 2017 at the earliest, a setback in the country’s bid to become a global force in the aerospace industry. The C919 jet, under development by state-owned Commercial Aircraft Corp. of China Ltd., or Comac, is the nation’s multibillion-dollar gamble against Airbus and BoeingCo.’s BA -0.43% aviation duopoly. But early-stage design difficulties have forced Comac to consider revising the production schedule for the plane, people familiar with the situation said.“It will take 90 to 96 months [from the program’s start in 2008] for Comac to build a new plane, so realistically the maiden flight will take off in late 2015 with first delivery starting two to three years afterward,” said one of the people speaking on condition of anonymity. Comac had earlier aimed for the C919 to make its first flight in 2014, with customer deliveries beginning 2016.

Chinese carriers remain major buyers of Boeing and Airbus jets, as the country’s economic prosperity drives travel demand. Comac, established in 2008 with registered capital of 19 billion Chinese yuan ($3.1 billion), has large state-owned backers including the Aviation Industry Corp. of China, Aluminum Corp. of China, Baosteel Group, and Sinochem Group. But as the main vehicle implementing China’s production program for large passenger planes, it remains untested and has formidable competition in Airbus and Boeing, which dominate the commercial jet market with the B737 and the A320.

“Production delays aren’t unusual, particularly for a new aircraft maker such as Comac,” said another person familiar with the matter.

“We’re nowhere near the level of rival aircraft makers such as Airbus and Boeing. They’re well-established while Comac has just started to construct its own new plane from scratch,” the person added.

So far, Comac has received orders for 380 C919 jets, mostly from domestic airlines and aircraft leasing firms. GE Capital Aviation Services, the world’s biggest aircraft lessor by fleet value and the aircraft-financing arm of U.S.-based General Electric Co., is the only foreign buyer with an order for 20 jets.

Comac hasn’t disclosed the list price of the jet. It unveiled a prototype of the 150-seat aircraft in 2010, but has yet to build the actual plane.

Comac’s experience in producing a smaller regional jet, the ARJ21, illustrates the difficulties aircraft makers face in securing tests and approvals before they can move on to commercial sales. The 78-to-90-seat turbofan short- and medium-range jet, which had its maiden flight in 2008, is expected to complete final certification in 2014 before its launch customer Chengdu Airlines operates the jet, four years behind its 2010 delivery schedule.