Boeing and Airbus may face heat from Russian, Chinese firms

The decades-old duopoly of Airbus A320 and Boeing 737 in the single aisle passenger aircraft market may be about to be broken was evident at the Farnborough Airshow near London earlier this month.

Russia’s MC-21 aircraft manufactured by the state-owned Irkut Corporation and the Commercial Aircraft Corporation of China’s (COMAC) C919 airplane attracted significant attention from airline executives and leasing companies attending the show indicating that customers could be looking at options beyond Airbus and Boeing.

The unique selling proposition of the two aircraft is that they are claimed to be cheaper to own and operate than Boeing or Airbus planes and confirm to the latest safety requirements. The potential customer interest is surprising as the two aircraft are yet to mark their first flight.

While the MC-21 is scheduled to hit the skies in mid-2017, the C919 may fly by early 2018. Despite just being runway models as of now, the Irkut MC-21 has notched up 175 confirmed orders while the C919 has 517 orders mostly from Russian and Chinese airlines respectively, which should be worrying Boeing and Airbus.

For Airbus and Boeing, the loss of 700 plus aircraft from Russia and China alone could be a big blow to their sales projections for the world market. The real market erosion will come when airlines in Asia, West Asia and South America start to look at the new commercial aircraft as viable alternatives to the B737s and A320s. etween the C919 and MC-21, the latter comes across as more likely to roam the world’s skies in the colours of various airlines.

The Irkut MC-21 is the first medium-haul aircraft to be designed from scratch during the last 15 years, according to Irkut. Despite the freshness it brings to the global civil aircraft market, it has the enviable task of doing better than the A320neo and the Boeing 737 MAX families of airliners which represent the latest evolution of the most successful aircraft in civil aviation history.

The reason to design an all-new single-aisle passenger aircraft arose in the late 1990s when Russian carriers bought a huge number of Boeing and Airbus planes. Both these aircraft were designed in the 1980s which was proving a constraint for operation in the Russian environment which meant 3-4 hours of flying time on average, a requirement for quick turnaround and airlines wanting highly customised seating arrangements. Russian flyers, like their Indian counterparts, would move more frequently between their seats and the toilet requiring a wider aisle.

Russian flyers are highly price sensitive and would look at the lowest fare possible. “The 737 has a fuselage width of 3.75 metres. Our aircraft has more than 4 m with which you could increase the cushion width or the width of the aisle to speed up in-flight service,” Kirill Budaev, vice president (sales and marketing) of Irkut Corporation said during the Farnborough Airshow.

The MC-21 is about 3 to 5 m lengthier than the B737 or A320 which enables it to accommodate 20-30 more passengers. This would bring down the ticket price by about 10% which would be a huge incentive for the average flyer.

The Chinese C919 could find a market in Africa and certain South East Asian countries which have good relations with China. The COMAC executives said at Farnborough that they are looking at low-cost airlines as potential buyers.

“For years, Airbus and Boeing have been selling used airplanes to low-cost airlines in certain markets at inflated prices. Our aircraft will be cost-effective and offer safety and comfort levels on par with latest-generation aircraft”, said Fang Li, COMAC marketing executive.

The Indian aviation market has been in the grasp of Boeing and Airbus for the last several decades and this is where Irkut expects to break their duopoly first outside of Russia. India has nearly 800 Boeing and Airbus aircraft on order of which more than three quarters are of the single-aisle type. According to the International Air Transport Association (IATA), air travel in India grew about 19% in 2015, compared with a 9.7% increase in China and 5.4% in the US.

Indian market

The IATA expects India to become the third-largest aviation market in the world by 2026. Boeing recently forecast that India would require 1,850 new aircraft valued at $265 billion in the next two decades, upping its prediction made a year ago by nearly 100 airplanes.

The new Indian civil aviation policy announced in June is expected to provide further impetus to India’s rapidly growing aviation market. Among the policy’s objectives is to provide substantially increased connectivity to smaller towns and increase ticket sales by four times in 10 years. Irkut is hoping to capture 5% of the Indian market over the next 10 years. However, with a negative perception of Russian aviation products, it will be a Herculean task for Irkut to convince Indian carriers to look at its aircraft.

“We accept we have a negative image because of which we have involved international suppliers in this programme, the same which supply to Boeing and Airbus such as Pratt & Whitney, Zodiac and Honeywell. We are also asking the Indian companies to participate in the programme by manufacturing components for the MC-21,” Budaev said.

Perhaps echoing his views, Indian ambassador to Russia Pankaj Saran has expressed hope for Indo-Russian joint production of MC-21 airliner and manufacture of its components in India. The Indian diplomat made the comments during a visit to the Irkutsk aviation plant recently where the MC-21 is manufactured.

Competition in the aircraft market is the first step to lowering ticket price for the passenger. The next half decade should see the MC-21 and COMAC C919 take to the skies and this is when Boeing and Airbus will start to feel the heat. For the Indian flyer, this is good news indeed.

(The writer, New Delhi-based senior journalist, specialises in defence and aerospace sectors)