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Business trends

Boeing's woes create opening for Chinese and Russian rivals

COMAC and Irkut hurry debuts of alternative narrow-body aircraft to grounded 737 Max

The grounding of the 737 Max jets may have airliners searching for alternatives.   © Reuters

JAKARTA/BEIJING/MOSCOW -- The worldwide grounding of Boeing's 737 Max airliner has generated an opportunity for rivals in China and Russia to compete in the narrow-body aircraft market, with airlines rethinking the troubled American jet.

Second thoughts on orders for the 737 Max are arising, especially in Southeast Asia.

Flag carrier Garuda Indonesia may cancel orders for 49 aircraft, following other airlines in the region such as Vietnam's budget carrier VietJet Aviation, Malaysia Airlines, and Lion Air -- the Indonesian budget carrier that suffered a 737 Max crash in October.

No airline has officially canceled orders for Boeing's single-aisle jet, which the company says is its fastest-selling airplane in history with about 5,000 orders from more than 100 customers.

Alternatives are basically limited to the Airbus A320 series. The competition between the two manufacturers is fierce within the market for single-aisle planes. Last year, A320 sales edged out those of the 737 by a count of 626 to 580, including older-generation models.

An Aer Lingus Airbus A320 makes its final approach for landing at Toulouse-Blagnac airport in France. The A320 is a rival aircraft to Boeing's 737 Max series.   © Reuters

Airbus has so far remained silent regarding Boeing's fatal crashes, but the European company's share price has enjoyed a nearly 7% bounce since just before the March 10 crash in Ethiopia.

Production of the A320 is already at full capacity, however, which is around 50 aircraft a month. There is a backlog of almost 6,000 planes, and Airbus is in no position to immediately boost deliveries, according to French media.

This has created an opening for Chinese and Russian state-owned players to pounce on.

Following the groundings of the 737 Max, China's Commercial Aircraft Corp., or COMAC, took to the domestic media to trumpet its goal of entering the global marketplace with the twin-engine C919. Wu Guanghui, vice president of COMAC and the C919's chief designer, says the company has applied for certification in Europe, with the goal of gaining approval in three to four years.

China's COMAC has global ambitions for its C919.   © Reuters

The C919 conducted successful test flights in 2017 and aims for type certification from China's aviation safety authorities in 2021. European credentials would further boost confidence in the jet's airworthiness. COMAC's ARJ21 regional jet, which seats 70 to 90 people, went on the market in 2016, but it has been certified only for flights inside China.

The C919 has reportedly won orders for 800 units, including those from newcomer airlines outside of China. But European certification will be the litmus test of whether the aircraft can meaningfully expand orders abroad.

In China, state airlines are essentially mandated to fly the C919, but there are indications that the plane could receive further help from Beijing. The chairman of state-owned China Eastern Airlines, Liu Shaoyong, submitted a proposal during the National People's Congress that would encourage carriers to use homegrown passenger jets "so domestic aircraft can have vitality."

In Russia, Irkut is developing the narrow-bodied MC-21, with the goal of winning certification as early as next year. The MC-21 conducted its maiden test flight in 2017. Irkut -- now a unit of state-controlled technology conglomerate Rostec -- completed the test flight of its third iteration of the MC-21 on March 16.

The plane will be sold chiefly in Russia and former Soviet states. Sales are expected to reach 1,000 units by the 2030s. However, sanctions imposed by the U.S. and the European Union have limited parts procurement from suppliers outside the former Soviet sphere. This has apparently caused delays in development as well as ballooning costs.

Additional reporting by Shuntaro Fukutomi in Tokyo and Coco Liu in Hong Kong.

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