Tariffs Boost Domestic Aircraft Production, C919 Completes First Flight
2min read The recent escalation in tariffs has accelerated the domestic production of large aircraft in the country. On March 30, the domestically produced large aircraft C919 completed its first commercial operation in the Northeast region. The aircraft, registered as B-919E, successfully took off from Xi'an Xianyang International Airport and began operating on the direct round-trip route between Xi'an and Guangzhou. This development has significant implications for the domestic aviation industry, particularly in the context of increasing tariffs on imported aircraft.
Analysts from various institutions have pointed out that the U.S. government's announcement of retaliatory tariffs on Chinese exports has created an urgent need for the domestic large aircraft industry to achieve self-sufficiency. In response to the potential increase in import tariffs on aircraft from the U.S., airlines may adjust their procurement strategies. In the short term, they might opt for leasing aircraft instead of purchasing them. Over the long term, there is likely to be a greater preference for ordering aircraft from Airbus or domestic manufacturers. This shift could lead to a significant reduction in Boeing's market share in the country, while Airbus and domestic aircraft manufacturers gain a price advantage. Key areas such as commercial engines, avionics, and aerospace materials, which have been bottlenecks, are expected to see rapid breakthroughs.
In terms of production capacity, as the batch production and delivery of the C919 aircraft accelerates, it is expected to break the monopoly held by Airbus and boeing. The related industrial chain has significant development potential. It is projected that the production capacity of the C919 will reach 150 units per year by 2027 and 200 units per year by 2029, with continuous expansion. On the demand side, according to China Commercial Aircraft Corporation, the global fleet of commercial aircraft is expected to reach 48,455 units by 2042, with China accounting for 9,969 units, making it the largest single aviation market in the world. Additionally, it is estimated that over the next 20 years (2023-2042), the country will receive over 9,000 new aircraft, valued at approximately $1.4 trillion.
Meanwhile, the C919 large aircraft is accelerating its flight plans in Southeast Asia and making positive progress in European certification. Analysts believe that with the acceleration of C919 production, increased deliveries, expanded route networks, and growing orders, domestic commercial aircraft are entering a period of rapid development. If international certification is successfully obtained, domestic C-series aircraft could play a significant role in the international aviation market, providing development opportunities for related industrial chain enterprises.
In the current environment of opportunities in the large aircraft industry, specific investment directions have been identified. Domestic engine manufacturers, which have long collaborated with international aviation giants, possess a mature industrial chain. In the context of significantly increased U.S. tariffs, these manufacturers may focus on developing the domestic market, which offers substantial growth potential and lower costs. It is estimated that over the next 20 years, the demand for new commercial engines in the country could exceed $600 billion, with an average annual demand of over 200 billion yuan, presenting a vast market opportunity.
Additionally, the value of onboard systems is high, and the domestic industry is transitioning from basic capabilities to advanced performance. The functionality and performance of aviation onboard systems directly impact the safety, efficiency, and operational costs of aircraft, serving as a key indicator of aircraft advancement. With the accelerated deployment of domestically produced aircraft such as the C919 and the C929 project, along with the rapid progress in domestic production, the domestic civil aviation onboard systems industry is poised for historic development opportunities.
