On August 30th, China’s three biggest airlines all announced that they would each purchase 35 ARJ21-700 regional jets.
The ARJ21-700 are indigenous jets, manufactured by Commercial Aircraft Corporation of China (COMAC).
As per a transaction disclosure document the catalogue price of one of the jets stands at $38 million, with the price including the airframe and engine.
This puts each 35-aircraft order at a list-value of US$1.33 billion with the total being 105 aircraft worth just under US$4 billion.
According to Reuters the deliveries are to take place between 2020 and 2024.
Furthermore, it is quite clear that purchasing 35 ARJ21-700 regional jets warrants some sort of reduction in price for the bulk purchase, as per China Southern’s filing.
“The aggregate actual consideration for the Comac Aircraft, which is payable in cash, and determined after an arm’s length negotiation between the parties, is considerably lower than the catalogue price as provided by Comac because of the price concessions granted by Comac in relation to the Comac Aircraft.”
As per COMAC itself, the ARJ21-700 is the first short-medium range turbofan regional aircraft independently developed by China in accordance with international civil aviation regulations, it owns independent intellectual property right, and is also the first aircraft of which the Type Certification application is submitted to Federal Aviation Administration (FAA) according to FAR25.
The ARJ21 has a layout of 78 to 90 seats, and a range of 2,225 to 3,700 kilometers.
ARJ21-700 aircraft obtained the Type Certificate from Civil Aviation Administration of China (CAAC) on December 30th, 2014 and the Production Certificate (PC) from CAAC on July 9th, 2017.So far, ARJ21-700 aircraft have been entered into route operation formally.
A total of 596 orders have been obtained from 22 customers.
It appears to be very similar to the MD-80, for which there is a construction license in China, but COMAC maintains that the ARJ21-700 is an original design.
The ARJ21-700 is long in the making, with the project beginning in March 2002, as part of the “10th Five-Year Plan” of China.
Back then the project was under the ACAC consortium, which was also state-owned. In 2009 the consortium was reorganized and became a part of COMAC.
The initial maiden flight was planned to take place in 2005, with passenger flights beginning 18 months later. The design work was delayed and the final trial production stage did not begin until June 2006.
In total, the program suffered 8 years of delays.
Its very first prototype was finished on December 21st, 2007, with its maiden flight planned for 2008. It was then delayed to September 21st, 2008, and finally took place on November 28th, 2008. The aircraft finally completed a long-distance test flight on July 15th, 2009.
The second ARJ21 prototype completed the same test flight on August 24th, 2009. The third prototype completed its first test flight on September 12th, 2009. The fourth aircraft completed its tests in November 2010.
The ACAC consortium initially aimed to manufacture 11 ARJ21s a year by 2010, and 30 per year by 2015. Despite these plans, ACAC only managed to build 10 aircraft by 2016, and 10 deliveries by 2018.
In November 2010, an ARJ21 wing failed to reach the predicted load rating during static testing. The wing’s failure then led the Civil Aviation Administration of China (CAAC) to limit the aircraft’s flight envelope during its flight test program. The new delivery date was then set at the end of 2011. After various problems, in 2012 it appeared that the jet could finally be mass-produced and receive certification.
Following that, it took a while for the ARJ21 to get United States Federal Aviation Administration (FAA) type certification, to be allowed on the global aviation market. There were hopes by COMAC to get FAA certification in 2012, 2013, 2014.
After years of delays, and finally receiving a shadow certification from the FAA, the first jet was delivered to Chengdu Airlines on November 29th 2015. So far, as of 2016, the AJR21-700 has an aviation type certification from the from the Republic of Congo, which is as lackluster as it sounds.
As of September 2019, neither the US Federal Aviation Administration nor the European Aviation Safety Agency have certified the jet, so it still can’t be sold everywhere.
The purchase of the AJR21-700 by the three biggest Chinese airlines has all the necessary markings of a government initiative to motivate Chinese companies to use the indigenous jet and boost the national economy.
According to FlightGlobal, China Eastern says its order will address a “shortage of feeder capacity” and improve its network. China Southern makes a similar statement and says the order will “strengthen the support of the trunk-routes market” and “further expand the market coverage.”
It is also quite suspect that China Eastern, China Southern and China Western simply decided to announce a purchase of the AJR21-700 on the same day.
Prior to this, only small Chinese airlines such as Chengdu Airlines and Genghis Khan Airlines have the ARJ21 of part of their fleets. Major orders of Chinese-made aircraft would ensure that money stays in the country instead of leaving for the competition.
Mitsubishi and Embraer are much more established in the region.
In comparison, Russia’s indigenous Irkut MC-21 passenger jet is an example of a complete lack of protectionism and supporting the domestic industry. The passenger jet is reportedly better than the aging Boeing 737 MAX, and at the same time the only thing the Russian government has done was to “suggest” that a company which has a long-standing history of using only the 737 should potentially purchase MC-21. And that was it.
No other large or small companies were offered to purchase anything, and they’ve not suggested to purchase the jet. There’s also been no potential government funding, tax cuts, or any incentives to purchase the jets.
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