In 1926, Western Air Express became the first commercial airline to offer passenger service in the USA – an event that essentially started civil aviation and gave birth to the US aerospace supply chain.
Now, nearly 100 years later and halfway around the world, China is undergoing a similar aerospace evolution, developing a homegrown industry anchored by Commercial Aircraft Corporation of China (Comac) and supported by a strengthening domestic supply chain.
In November 2020, Comac received design approval from the Civil Aviation Administration of China (CAAC) for its C919 single-aisle aircraft, achieving a critical milestone in the programme’s development. The approval precedes additional C919 flight tests and CAAC’s eventual approval of the jet to fly passengers in Chinese airspace. Comac plans to deliver the first C919 by the end of 2021 to a Chinese customer.
The C919 is not a revolutionary product; it features versions of the same CFM International Leap engines that power Airbus A320neo-family jets and Boeing’s 737 Max, and uses previous-generation systems and technology.
But the programme is central to China’s long-term aerospace goals, which include developing a competitive domestic aerospace industry, securing the entire domestic aviation market and then taking 20% of the global single-aisle market, currently controlled by the Airbus-Boeing duopoly.
Toward that end, Comac’s attention will soon pivot from developing the C919 to building a supply chain to support initial C919 low-rate production.
Comac is just beginning that process, doing so largely through technologies acquired via joint ventures with foreign suppliers, many of them in the USA, which in return gain access to China’s market and lower-cost labour. Comac’s design and manufacturing teams and Chinese suppliers have also benefited from work visa programmes, through which their employees gained experience working at US aerospace companies.
As a result, as things stand today, the C919 is largely supported by US suppliers and others based outside China.
But in 20 years, China will not be so dependent on foreign firms. The country will work quickly to replace foreign-sourced parts with Chinese-manufactured parts.
Having developed the C919’s structure, the Chinese domestic supply chain will work to develop interiors, mechanical assemblies and electrical systems by the end of this decade.
The rise of China’s domestic supply chain will culminate with domestic production of engine systems – look for that to happen by the end of next decade.
By comparison, US and other western aerospace supply chains largely developed through a century of experience.
Over many years, companies methodically developed designs and manufacturing methods, and the testing needed to ensure designs meet expectations. For example, seal and elastomer compounds need precise mixing to prevent defects. High-quality composites require complex multi-step manufacturing that involves material layup, temperature storage and autoclave treatment. Also, exacting mechanical design parameters and material processes are critical to optimal operational performance. US and other western suppliers developed such technologies and methods over decades and at great cost.
Those companies currently working in joint ventures with Chinese counterparts had best prepare for the possibility that their partnerships will be phased out. Such may happen when Chinese suppliers evolve into independent competitors, capable of producing key components and assemblies themselves.
I recently discussed this topic with Teal Group aerospace analyst Richard Aboulafia. He suggested that the size of China’s aerospace market make it the only country capable of developing its own aerospace supplier ecosystem. He also said China is the only market in the world where the government will mandate creation and sustainment of a domestic supply chain.
The Chinese will eventually catch up. The shortened learning curve they have pursued may delay, but will not prevent, China’s ability to develop current-generation technology.
To counter such future competition, US and other western suppliers should lean on assets that include their first-mover advantage, adaptable manufacturing facilities, experienced staff, unique long-term expertise and a depth of knowledge accumulated over a century. Their workforces in particular should be leveraged to research and develop new technologically advanced products and designs, which will position their companies for long-term success.
Alex Krutz is managing director at Patriot Industrial Partners, an aerospace and defence advisory firm that focuses on manufacturing strategy, supply chain optimisation and business transformation.