June 01, 2012
Chinese airframer Comac will be the biggest threat to Boeing and Airbus and most likely to succeed in developing a program comparable to those offered by the duopoly, says Jim Albaugh, president of Boeing Commercial Airplanes.
Speaking at the Aviation Club of the U.K. on Thursday, Albaugh said Boeing and Airbus face competition from Canada, Brazil and China, but that “I don’t believe all of them are going to be successful. My guess is one of them will emerge and become a very good competitor for us, and I won’t be surprised if it was China.”
Albaugh supports his view by noting China’s $5 billion commitment to developing its regional jet, which he says may never be certified, and a further $30 billion for the C919 narrowbody program. “If that’s going to be the airplane or not, I don’t know, but eventually, they will get it right,” said the Boeing executive.
He suspects Comac initially will sell aircraft in China and countries with close links to the country, but eventually will have a product that can compete with Airbus and Boeing offerings.
Albaugh, however, is less concerned with competition from Brazil, noting that Embraer has decided to focus on the regional jet market. With Bombardier’s CSeries, however, he is less emphatic, noting, “With Bombardier, you have to assume they’re going to do what they say they’re going to do,” he said, adding, “Competition is a great thing. Airbus coming along made Boeing a better company. And Comac will make both Boeing and Airbus better at what we do.”
China’s emergence comes as established aerospace markets like the U.S. and the U.K. reduce their investment in research and development to their lowest levels in decades, says Albaugh, noting that China has tripled its investment in technology and people in the past decade.
“What are you going to do with all these emerging threats? The answer is simple: You have to evolve the airplane and produce more value for the customer. The things that Willie Walsh [CEO of International Airlines Group] and others want is fuel efficiency, environmentally friendly aircraft and low maintenance costs,” Albaugh added.
Boeing’s product strategy is to evolve the 737 for the third time, says Albaugh, and to continue developing the 787. The airframer also is considering a 757 replacement, but for now the 737 MAX achieves 95% of the missions assigned to the larger narrowbody.
Albaugh also says Boeing is taking a hard look at its 777 program, however, he notes that “the question is when [to redevelop]. We are working with customers to find out what their needs are and getting the configuration right.”