The aeronautical sector is emerging as one of the great affected by the Commercial War between the United States and China. To the growing tariff barriers imposed by both powers, the alleged attempt to block the delivery of new Boeing aircraft in its territory is now added. The information, published by Bloomberg at the beginning of this week, also points out that Chinese airlines will not be able to acquire equipment or pieces related to aviation to US suppliers.
When a scenario like this is raised, it is easy to think that the closure of doors to Boeing and other American manufacturers can translate into an opportunity for firms such as Airbus or Comac. And, in part, it is. However, it is convenient to clarify: while Airbus’s main challenge is to increase its production capacity, in the case of Cabel the difficulties are deeper. The United States, in fact, could dynamite its most ambitious project overnight. As? Let’s look at the details.
A plane with too many pieces borrowed
In recent years we have seen how China has managed to make a decisive leap in multiple industries. One of the most obvious examples we have in front of our eyes: the automobile sector. For a long time, Chinese cars dragged a questionable reputation and a little competitive offer. Today the situation is very different. Something similar could be happening in commercial aviation. Although Airbus and Boeing continue to lead with slack, Cabe has been trying for years A hole in that historic duopoly.
One of the key pieces in this important objective is Comacc C919, an aircraft designed and assembled in China with an eye on competing directly with the Boeing 737 Max and the Airbus A320. With capacity for between 158 and 192 passengers and autonomy that ranges between 4,075 and 5,555 kilometers, its current deployment is still limited. However, if we attend to the growth rate of the Asian giant, everything indicates that it is a matter of time that the C919 is also consolidated outside its origin borders.
But the project drags, at least for now, an Achilles heel that often goes unnoticed: a deep dependence on American technology. That’s how it is. The pride of Chinese aviation, the most ambitious development of its entire history in this sector, works thanks to key components manufactured by a rival country. For years, these pieces have crossed the ocean without major obstacles. But a block could hit the very heart of the Chinese dream of having its own regional reference plane.
So what pieces are we talking about exactly? To understand it, you should go to Leeham News and Analysis, a specialized firm that has been closely following the ins and outs of the aerospace sector.
- Flight data recorders – General Electric (United States).
- Meteorological radar – Rockwell Collins (United States).
- Communications and Navigation Systems – Honeywell (United States).
- Antihielo Ala – Liebherr (Germany) system.
- Aluminum components for fuselage – Arconic (United States).
- Motors – CFM International, a joint venture between GE (United States) and Safran (France).
- Thrust investors – Safran (France).
- Fuel System – Parker (United States).
- Fire detection – Kidde (United Kingdom).
- Wheels and brakes – Honeywell (United States).
- Tires – Michelin (France).
- Landing train – Liebherr (Germany).
- Cola y alas – Aviation Industry Corporation of China (AVIC) (China).
Just check the previous list to measure the blow that would be the lack of any US component in the C919 assembly chain. Leeham News and Analysis already warns that the trade war threatens the project. In the same line is Ron Epstein, an analyst at Bank of America, who declared Reuters: “If China stop buying aeronautical components to the United States, the C919 program will stop or die”.
The current situation and future perspectives
In recent days, the commercial war has intensified with rapid and unpredictable movements. And the truth is that half the world – individuals, companies, governments – still tries to understand how far their effects come. If we focus on the order of the Chinese government on aeronautical components, everything indicates that, for now, it affects only airlines. That would leave manufacturers such as Comac with margin to continue buying the pieces that need the United States. At least for the moment.
However, the 125% retaliation tariff (which, added to the previous 20% by the Fentanyl case, leaves the invoice in 145%) governs for imports from the United States. That includes engines, plane or brakes that Comac buys for its C919. The practical result is that each US component would cost me almost twice and a half its original Pricea scenario hardly aware of any manufacturer who aspires to maintain the viability of your business.
It is time to wait to see what all this flows. If the barriers imposed by both powers will fall and the trade will be reactivated. But there is also another scenario: that the United States imposes export controls on key components for Chinese aviation. He already did it with the Nvidia chips to stop his advance in artificial intelligence. This situation could reinforce China’s bet to develop your own key technology, although it still has a long way ahead.
Images | Comac
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