The global aviation industry succeeds through win-win cooperation

Editor’s note: Keith Lamb graduated from Oxford University with an MSc in Contemporary Chinese Studies. His main research interests are China’s international relations and “socialism with Chinese characteristics”. The article reflects the opinions of the author and not necessarily the views of CGTN.

The Commercial Aircraft Corp. of China (COMAC) has been developing its twin-engine C919 narrow-body aircraft over the past 14 years. Recently, the C919 has successfully completed its test flights, and this $70 billion project will soon enter the market.

Many factors delayed the project, such as the COVID-19 pandemic. Chinese test standards, set by the Civil Aviation Administration of China (CAAC), have been rigorous, with 40,000 man-days specified to examine the airworthiness of the C919.

US export controls, put in place by former US President Donald Trump, such as the need for special licenses to export technology and parts to China, have also slowed the project. On the one hand, the C919 represents a first for the “made in China” aeronautical brand, but like most cutting-edge technology projects, it is a product closely linked to international trade and investment. American companies, including Honeywell and General Electric (GE) are heavily involved, as well as the French Safran which, with GE, manufactures the CFM LEAP-1C engine which will power the C919.

Banning trade with China would slow construction of the C919, but China’s technological expertise means the hurdles can be overcome. Accordingly, it is better to trade and cooperate. This is precisely what American companies have indicated by granting them special licenses to export C919 parts to China.

This bipolar position represents the perceived dilemma of a rising China by American elites. The zero-sum side of this split personality fears that the monopoly interests of the United States will be challenged; therefore, all challengers in the market and geopolitical space will be punished. Nevertheless, China’s rise remains unstoppable and that means the pie is getting bigger. While more competition means a smaller percentage of the pie goes to American capital, every fraction of that pie will get much bigger. Therefore, the win-win side of the American split personality wants to participate.

Therefore, vis-à-vis the United States, Chinese airlines do not know where they stand. The recent announcement of China’s “big three” airlines – Air China, China Southern Airlines and China Eastern Airlines – buying 292 Airbus planes, worth $37.2 billion, from their US rival Boeing demonstrates this.

The dilemma for the United States will intensify over the next two decades as China’s growth presents a greater opportunity for global capital. China’s consumer aviation market is already the second largest in the world. According to Boeing, by 2028, China will become the largest and Airbus predicts that by 2037, 1.8 billion people are expected to travel by plane in the country, which is equal to the total number of air transport passengers in the world. world in 2004.

Moreover, when it comes to the consumer aviation market, one should not just consider China’s rise in isolation. Global development through the Belt and Road Initiative (BRI) means that more people in the Global South are about to enter the middle class, which will lead to more air travel.

As such, it’s understandable that Boeing’s response to the Chinese market “lockdown” was a huge disappointment. Usually, a quarter of all Airbus and Boeing deliveries go to China.

Ironically, the fear is that China’s growth and technological prowess, represented by the launch of the C919, will challenge the United States. Yet the US-led trade war is dampening profit margins.

In the short term, the C919, which has not yet received massive orders, should not pose a significant challenge to the Boeing-Airbus duopoly. FlightGlobal predicted that this duopoly will continue until 2035. Although the C919 presented a short-term challenge, its cooperation with foreign manufacturers will be a boon for Western capital. Therefore, there is more than enough time to adapt to a fairer world where competition does not only come from China but also from other developing countries.

Nevertheless, as Chinese companies become more proficient in aircraft technology, more C919s will be made in China. Indeed, with the current bipolar animosity of US administrations towards China, such a trend is only prudent. In addition, China’s huge domestic market and the C919’s projected $50 million price tag, about half that of the narrow-body Boeing-Airbus equivalent, mean the C919 will be a welcome competitor for consumers. especially in the countries of the South.

At the end of the day, as long as American capital continues to innovate, in a growing market, there will be opportunities for it. Nevertheless, technological innovations require resources and talents to nurture ideas. Rather than wasting resources overseas, the United States could work to develop its labor pool and business technologies so that it is well positioned for greater opportunities.

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