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  • The China Threat to Airbus and Boeing
    Posted by Robert Wall 9:41 AM on Jan 04, 2012

    That China is the main concern for Airbus and Boeing as they look at new rivals has become patently obvious in the last two years.

    There remain plenty of uncertainties, however, about the timing of the threat and its exact nature.

    So what is the main threat that China poses? Price, if you ask EADS CEO Louis Gallois. And, he indicates, it is perhaps less about the actual price, but how that will shape market expectation.

    “They will have a new benchmark on price,” Gallois said during a recent investor conference. And, he adds, that is something the incumbents will have to take account of.

    Just how much price leverage China can actually wield remains to be seen, though. The C919, for instance, relies heavily on western suppliers, so those costs for Comac should be roughly on par with those for Airbus and Boeing. And for the actual final assembly work, that represents only a small fraction of the total cost of the aircraft – Airbus itself is finding the assembly costs at its Tianjin site in China are no lower than those in Hamburg or Toulouse, where it is working with an expert workforce.

    As to when the threat will materialize. Gallois expects the Comac C919 to materialize somewhat later than planned, in 2016, but still be in the market at the end of the decade. Gallois won’t speculate on why he expects the C919 to be late, but there are some indications in the reporting here at Aviation Week.

    As to a Chinese widebody, Gallois expects that project to follow about ten years later.

    Tags: tw99, Comac, Airbus, Boeing

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