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Asian plane makers struggle to take off in crowded market

9 Comments
By Martin Abbugao

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What kind of business models do these plane-makers operate on? What do their shareholders have to say about about, because I would be really, really p***ed off, given the massive capital investment involved and the sky-high barrier entries.

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Crowded *Duopoly

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To quote a previous Japan Today article:

China’s bid to challenge Boeing and Airbus falters:

The effort has attracted the attention of U.S. federal prosecutors, who in 2018 charged a group of Chinese intelligence officers, hackers and company insiders with breaking into the networks of 13 aerospace manufacturers around the world, including a company whose description matches CFM, in order to steal sensitive data that might help China build a jet engine. China has denied any involvement in hacking.

A china-made plane carrying hundreds of lives, including that of babies and children....made from stolen technology.

I'd rather trust a B737 Max.

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The international market is just too saturated with aircraft from the established manufacturers so there's very little space for new players

Then why is there years of waiting list for planes ?

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I'd rather trust a B737 Max.

Not at all. Boeing's negligence has tarnished the brand and this will potentially have opened up the market to competitors. Yes, Airbus will of course be there to take up some of the slack when providing for demand, but there may yet be others who will benefit from Boeing's incompetence.

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The idea of having Chinese made jets in the western market just won’t fly (excuse the pun)

Main reason being, as pointed in this article,  “rigorous safety standards”, which is not part of Chinese culture when it comes to manufacturing and industrial processes in general. Japan has an edge here and they will exploit it.

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The problem with any new entrant into the Commercial Jet market place, is that they're new.... and as such has no track record on Safety, let alone experience. Sadly, most of the changes to aircraft safety have been as a result of fatal crashes - we learn by our mistakes.... so for a new entrant... ?

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@JeffLee

What kind of business models do these plane-makers operate on? 

Mitsubishi : Sell 500 jets to the US regional airlines, 400 to Japanese low-cost airlines.

COMAC : Replace Boeing and Airbus imports with the C919.

@JoseRaul

The idea of having Chinese made jets in the western market just won’t fly (excuse the pun)

That's not what Chinese are aiming for. All they need to do is to replace Boeing and Airbus imports with COMAC jets. No need to export, domestic consumption alone is large enough to justify such a program.

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Mitsubishi : Sell 500 jets to the US regional airlines, 400 to Japanese low-cost airlines.

Unrealistic figure. Regional market is highly fragmented with regional jets occupying less than half of market share, and soon less because of climate change. It's no coincidence that ATR and Bombardier turboprops are still flying today despite being based on old airframes. They are at least 30% more efficient, can take off and land at more airports, cheaper to run (Dash 8 can break even at 1/3 full), and reliable.

As for economics. Longview Aviation Capital just paid $300 millions the the entire Bombardier Q line (which includes the Dash 8), with firm orders on the book and possible revival of JV with Korea Aerospace. Compare this to $7.3 billions, and nothing to show for it, and no clarification as to the nature of the order book.

I'm hoping I'm wrong for the sake of MHI employees, but until they clarify the 'firmness' of the orders it's only as good as an expression of interes.

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