China-developed C919 Jet Expected Price Doubles, To Match Boeing ...

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 China-developed C919 jet expected price doubles, to match Boeing and Airbus

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China Eastern Airlines said that it is planning to raise capital to buy four C919 aircraft from the Commercial Aircraft Corporation of China.

PHOTO: ENGLISH.COMAC.CC

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Published May 17, 2022, 02:35 PM

BEIJING (CAIXIN GLOBAL) - A China-developed jetliner that Beijing hopes will rival those of Boeing and Airbus is going to cost nearly twice the price anticipated.In a Tuesday (May 10) filing to the Shanghai Stock Exchange, China Eastern Airlines Corp said that it is planning to raise capital to buy four C919 aircraft from China's state-owned aerospace giant Commercial Aircraft Corp. of China (COMAC). Each jet is listed for a price of 653 million yuan (S$134 million).That price would put the C919 in the same range as narrow-body competitors like the Airbus A320neo, with a list price of US$111 million (S$154 million), and the troubled Boeing 737 Max, which has a list price of US$117 million.Analysts had initially estimated the C919 to cost around US$50 million, giving it a significant cost advantage over those of the established foreign duopoly.The four C919s are part of China Eastern's broader fleet expansion plan, which consists of 24 domestically developed ARJ21-700 regional aircraft, six Airbus A350-900 wide-body aircraft and four Boeing 787-9 wide-body aircraft, the filing said.In order to fund the purchase, China Eastern plans to raise 10.5 billion yuan by selling its A-shares to a consortium of up to 35 investors including its controlling shareholder China Eastern Air Holding, according to the filing.The 38 airplanes will cost a total of US$4.38 billion, or 28.9 billion yuan, and China Eastern said that it will raise extra funds through other channels to fill the cash shortfall. The eventual sale could cost less as aircraft-makers typically offer bigger discounts to customers who buy in bulk, an industry insider told Caixin.In March last year, China Eastern placed the world's first formal order to buy five C919s, which it wanted to deploy on routes from Shanghai to several domestic cities including Beijing, Guangzhou and Shenzhen.Under development since 2008, the C919 is designed to seat 158-168 passengers and targets the same market as the Airbus A320 and Boeing 737. While the aircraft made its maiden test flight in May 2017 with six prototype airplanes operating in different regions across China, the C919 has yet to be certified by Chinese aviation regulators as airworthy.About 60 per cent of the main suppliers to the C919 are American companies such as General Electric, Honeywell and Eaton, according to a report by the Centre for Strategic & International Studies, a think tank based in Washington. Deliveries of the 90-seater ARJ21 regional aircraft, which is also developed by COMAC, started in November 2015, with customers including Air China and China Southern Airlines.China Eastern, which is also listed in Hong Kong and New York, also plans to raise another 4.5 billion yuan from the consortium, which will be earmarked for replenishing its working capital, according to Tuesday's filing.Earlier this year, China Eastern made global headlines after one of its Boeing 737 passenger jet carrying 123 passengers and nine crew members crashed in Teng county in South China's Guangxi Zhuang autonomous region. As of the end of 2021, the company operated 758 passenger aircraft, making it China's second-largest carrier by fleet size.This story was originally published by Caixin Global.

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