COMAC jets in Vietnam show China’s push for international market Via Reuters
Written by Phuong Nguyen, Francesco Guarascio and Lisa Barrington
China’s campaign to break into foreign aviation markets with domestic COMAC aircraft has intensified, as it has been forced to appeal to Vietnam to authorize its flights in that country, according to two people with knowledge of the talks and documents.
COMAC’s actions in Vietnam show how the state-owned company has over the past year embarked on a deliberate marketing approach to regulators and airlines as it seeks to compete globally with leading Western aircraft manufacturers Airbus and Boeing (NYSE:).
After months of negotiations, Vietnam’s top private airline VietJet was supposed to start on Jan. 15 short-term leases on the domestic route of two C909 regional jets used by China’s Chengdu Airlines crew, according to documents seen by Reuters that provide insight into its strategy.
But Vietnam’s aviation regulator has yet to approve the deal, wary of greenlighting the aircraft authorized only by China and Indonesia, the two people and a third person said.
The lease was reported by Vietnamese media, however the approval delay, VietJet’s long-term strategy for COMAC jets and the aircraft manufacturer’s efforts to obtain regulatory approval, including offering favorable financial and training terms, were not previously reported.
The 90-seat C909, until November known as the ARJ21, was China’s first jet-powered aircraft to reach commercial production and entered service in 2016, with 160 delivered to date.
The regional aircraft is not as high-profile as COMAC’s more advanced C919 aircraft, but it will allow the planemaker to gain a foothold in the world’s fastest-growing aircraft market and increase its visibility outside of China ahead of the C919-up production road.
It would also send a message to rivals.
VietJet has been in talks with a foreign employer for months to lease two E190 regional jets built by Brazil’s Embraer, the world’s leading manufacturer of passenger jets, said various sources familiar with the negotiations, and one of the pilots was in the process of being leased for those planes.
But the talks broke down late last year, Vietnamese media reported. VietJet intends to use Embraer or COMAC aircraft to connect Vietnam’s major cities with the tourist archipelago of Con Dao, where larger aircraft cannot land.
The two people with knowledge of VietJet’s talks with COMAC said the Chinese offer was subject to attractive financial terms that one of the people said were “too good to resist.”
These people refused to be named because the talks were not public.
VietJet, one of Asia’s largest low-cost carriers with a fleet of about 100 Airbus jets and nearly 200 Boeing 737 MAX jets, declined to comment.
COMAC, Vietnam’s civil aviation authority and Chengdu Airlines did not respond to requests for comment.
THE CHARM IS HIDDEN
China and Vietnam have deep economic ties and in recent months they have started cooperation in areas such as defense and transport infrastructure which had been considered a non-starter due to the history of conflict between the communist-ruled neighbors that continue to be in conflict in South Africa. Borders of the China Sea.
As it became clear that VietJet would not get regulatory approval in time to start the C909 lease last week and benefit from the busy New Year travel period that starts next week, Chinese authorities have offered a charm.
COMAC Board Director Tan Wangeng visited Hanoi last Wednesday and Chinese President Xi Jinping had a phone call with Vietnamese leader To Lam on the same day, where he urged countries to “strengthen communication,” Chinese state media reported.
Regulatory and VietJet personnel were scheduled to be at COMAC facilities in Shanghai from Jan. 14 to receive 10 days of training on C909 standards, operation and maintenance, VietJet documents show.
It is unclear when Vietnam would ratify the agreement, but shortly after Xi-Lam’s call, the Vietnamese government publicly said it was working to remove regulatory barriers to allow COMAC aircraft to operate in the country.
Rob Morris, head of global consulting at Cirium, said the lease may not require a full certification review of the C909 aircraft by the Vietnamese regulator.
“Therefore, I think this agreement can be done quickly,” he said.
GLOBAL PROGRAMS
VietJet’s lease of two COMAC jets is a small sum that industry sources said did not make commercial sense for a major low-cost airline.
But after that, VietJet will eventually look to launch other flights, including possibly routes to China, said a December 17 VietJet document.
VietJet’s discussions with COMAC included the ultimate goal of using C919s in the future, according to a separate source familiar with the matter.
The C909 and C919 are currently only flown by Chinese airlines except for one Indonesian carrier that uses the C909.
Both aircraft have strong safety records with no known accidents, but have very few flight hours compared to competing models and have not yet been approved by Western regulators.
COMAC demonstrated its aircraft last February for the first time outside of China in Singapore, including a stop in Vietnam, marking a change in its previously limited public relations outside of China.
In January, Brunei-based GallopAir leased a China Southern Airlines C909 to Brunei as a stopgap measure while the country’s regulator considered the aircraft’s certification, CEO Cham Chi said.
GallopAir in 2023 ordered 15 C909s and 15 C919s, according to the first non-Chinese C919 order.
COMAC has been reaching out to airlines, regulators and airlines in Asia and beyond, and said this month it wants the C919 to fly to Southeast Asia next year.
About 16 C919s fly with Chinese airlines, and COMAC aims to produce 30 this year.
COMAC is pursuing EU certification for the C919, but the lack of certification of its aircraft by regulators outside of China remains a significant obstacle for COMAC to be accepted by foreign airlines.
Vietnam’s regulator wants to make sure that any approval would not jeopardize compliance with foreign aviation regulators, including the US, the two people said.
