Airbus’s 2004 decision to establish an A320 final assembly line in Tianjin was a milestone in its growth in the Middle Kingdom.
Today, the European manufacturer views Tianjin as a paragon of its industrial co-operation with China. While some industry observers discount the importance of the line in either winning orders or boosting China’s aerospace sector, Airbus believes it has “undoubtedly” increased its market share in the country. The facility, inaugurated in 2008, has now delivered more than 300 A320-family jets.
Airbus entered the China market in 1985 with the delivery of an A310 to China Eastern Airlines. In that year it had 6% of the market, but this grew rapidly through the 1990s and 2000s, eventually making it an equal to Boeing. Today, China absorbs about 20% of Airbus’s global production.
Last March, Airbus took things to the next level, breaking ground on an A330 completion and delivery centre. This is an extension of its collaboration with AVIC and the Tianjin Free Trade Zone. The widebody facility is adjacent to the A320 family line, and will perform cabin installation, aircraft painting, flight tests and aircraft delivery. Assembled aircraft will be flown from Toulouse to Tianjin, with the majority of the completed jets going to Chinese customers.
“I am personally committed to this partnership in China,” Airbus commercial aircraft president Fabrice Brégier pledges.
The A330 completions project elevates Tianjin, and China, to a different league. Once operational this year, Tianjin will become the third city in the world to deliver both narrowbody and widebody jets, after Toulouse and Seattle.
Airbus says construction of the new facility is proceeding “smoothly”, and that the first wave of Chinese employees has been sent to the A330 final assembly line in Europe for training. If all goes to plan, Tianjin will deliver its first A330 in September. The A330neo and A350 will also be added at some point.
Flight Fleets Analyzer shows that Airbus delivered 147 aircraft, the majority of which were A320-family jets, to China in 2016. Boeing, meanwhile, handed over 165 aircraft, mostly 737s. In less than a decade, China is set to overtake the USA as the world’s largest aviation market. Both manufacturers will no doubt strive to keep relations warm, to ensure that aircraft deals continue to come through.
For years, Boeing stuck to the rhetoric that it did not need to set up a local completions or manufacturing facility to do business in China. Instead, it would grow its presence by deepening partnerships across the country. Meanwhile Airbus, coming from behind, continued to gain market share, now accounting for about half of China’s fleet.
In September 2015, Boeing finally announced that it would open a 737 completion and delivery centre in China: its first such foreign facility. Curiously, it will collaborate with Chinese manufacturer Comac, which is building the C919 to compete with the 737 and A320. The facility will install interiors, paint and deliver 737s to Chinese customers.
Progress on the project has been slow. It took a year before the location was confirmed to be the coastal city of Zhoushan, and until now, neither Comac nor Boeing has given an indication as to when the factory will open.
Under US President Donald Trump’s administration, Boeing could also be a target for retaliation in any trade war with China. Trump has criticised Beijing and even threatened to impose tariffs on imports from China, and keeping jobs in America is high on his agenda.
Airbus, meanwhile, has derided Boeing’s late arrival, saying that to gain market share from China, one needs to be “looked at as bringing value to the country”. This, Brégier says, means partnering long-term and in areas which are not “industry offsets” – merely producing what the manufacturer no longer wants to produce elsewhere.
Should Boeing continue to take a back seat, it could leave more opportunities for Airbus, which has so far demonstrated more agility in China.
The European manufacturer has said it is looking at potentially raising production rates on its Tianjin A320 assembly line, as it gears up to raise the narrowbody’s global production rate to 60 units a month by mid-2019. The line currently produces four aircraft a month, and delivered 51 jets in 2016. It has the capacity to assemble six aircraft a month, simply by “speeding up” time spent at each station, without the need for new infrastructure such as hangars and jigs. This year, Tianjin will also start producing A320neos.
Airbus, however, maintains that the Tianjin facility is a joint venture and that any decision to raise production must first be agreed with its Chinese partners.
Airbus already leads Boeing in terms of in-service widebodies in China – accounting for 194 units, compared with Boeing’s 166, Fleets Analyzer shows.
Chinese airlines have been aggressively launching long-haul international services in recent years, to match the population’s growing affluence and desire to travel. Both manufacturers will seek to push their new-generation widebodies, but the A330 appears to be the immediate beneficiary of the airlines’ long-haul push.
While Airbus does not rule out setting up a widebody production line in China, Brégier points out that it does not currently have a business case to do so. This is especially so since widebody assembly is “more complex and costly”.
“China has focused, rightly so, on single-aisle a lot and will continue to procure lots of single-aisles, but I’m sure the next step will be getting more widebodies. So perhaps one day there will be enough market to look at such an investment,” he says.
Comac the disrupter
Meanwhile, all eyes are on Comac, as the manufacturer’s C919 edges towards a first flight some time this year.
Analysts struggle to define how long it will take for Comac to become an influential aircraft manufacturer. What they do not doubt, however, is that the nine-year-old Chinese state-owned company has what it takes to break Airbus and Boeing’s long-held duopoly.
“Comac has a golden opportunity with the huge [China] market and government backing. It has all the keys to be successful,” one Western supplier involved in the C919 tells FlightGlobal.
The C919 may not yet be flying, but Comac already has commitments for 570 aircraft from 23 customers, most of which are Chinese airlines and leasing companies. China Eastern Airlines, one of the largest carriers in the world, will be launch customer for the jet.
Brégier says that while Comac will “clearly not” catch up with Airbus and Boeing in the next five to 10 years, he considers the manufacturer “a very real competitor”.
Analysts say Comac must, however, go beyond the delivery of the first aircraft and ensure a successful production ramp-up. Thereafter, customers need to operate the C919 efficiently, with the manufacturer also needing to demonstrate a clear ability to support the type.
While Chinese airlines and lessors may be nudged to support the indigenous programme, they are used to the reliability and performance of Western-built aircraft, and will be unwilling to let an inferior product affect their operations.
Suppliers who worked on the earlier ARJ21 say Comac learned valuable lessons from its long and tortuous journey on the regional jet programme, and it will only improve going forward. Beyond the C919, it has already started work on a widebody joint venture with Russia.
For now, China has voiced its aerospace ambitions, and Comac bears the weight of that dream on its young shoulders.
Source: Flight International