COMAC Slowly Ramps Up ARJ21 Production

by Douglas Royce, Senior Aerospace Analyst, Forecast International.

COMAC’s ARJ21-700 program delivered its second aircraft to launch customer Chengdu Airlines in October 2016. The company delivered the airline’s first aircraft in November 2015, but it did not enter service until the following June. A slow ramp-up in production will follow as COMAC works with operators to resolve problems that are bound to crop up after an aircraft enters service.

COMAC has taken in around 160-170 orders for the ARJ21, some of which may be more a commitment than a firm order. It has lost two export customers it initially signed up for the program. Myanmar Airways canceled its order for two in September 2012 when it decided to lease Embraer 190s instead. Lao Airlines has ordered two Airbus A320 family aircraft and now says it would take the ARJ21 only if FAA certification is achieved, a polite way of canceling its order since the ARJ21 will not receive U.S. certification anytime soon.

Thailand’s City Airways signed for 10 ARJ21s in September 2015, with three aircraft to come from ICBC Leasing’s portfolio of orders. The new order is a good get for COMAC, but selling the aircraft outside China continues to be difficult.

The ARJ21-700 is heavier than competing aircraft and will be burning more fuel than even current models in the market, let alone the newer, more efficient re-engined E-Jets family and the Mitsubishi Regional Jet (MRJ).

COMAC’s ability to support the aircraft in service will need to be proven to the market. Operators consider aftersales support a critical component of a purchase decision because of the need for their aircraft to be available to make revenue flights, and Bombardier and Embraer offer operators a track record on quality, support, and customer service.

Complicating sales will be the issue of financing. Residual values are an important component of financing a new aircraft, and estimating what an ARJ21 will be worth after delivery and beyond will be tricky for some years to come.

China is expected to be the primary market for the -700. Production of the aircraft is projected to be modest but supported by the Chinese government, giving the program a future whether or not it succeeds on the world regional jet market.

Please feel free to use this content with Forecast International and analyst attributions, along with a link to the article. Contact Ray Peterson at +1 (203) 426-0800 or via email at ray.peterson@forecast1.com for additional analysis.


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