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Sky Wars: China + Bombardier Face Off Against Boeing and Airbus

Last week, I looked at the growth in competition in the sub-100 seat aircraft market, but the bigger battle may very well be felt in the 100-to-200 seat market. This market has changed a lot over the years, and there are now two potentially credible threats that are coming together to fight the cozy Boeing-Airbus duopoly that has ruled the skies for 15 years.

Ever since Boeing (BA) bought McDonnell Douglas in 1997, it and Europe's Airbus consortium have ruled the large commercial aircraft market. If you wanted an airplane with more than 100 seats, those outfits were the only game in town. But now Canada's Bombardier (BBD.B) is attacking on the lower end, while Comac in China is coming in from the high end. The two are coming together to create a formidable competitor.

In the 100 to 200 seat market, Airbus has poured its resources into updating its A320-series airplane with better engines for more range and increased fuel efficiency. So far, airlines like Lufthansa and Virgin America are jumping in with orders. Most of the interest has been in the 150 to 180 seat grouping, from what I can tell.

Boeing, meanwhile, has taken its time figuring out how to deal with this update from Airbus. It's made no commitments so far, but it has indicated that a larger airplane than the current 737 may fit the bill. If that's the case, then it means Boeing will all but walk away from the sub-150 seat market. Does that mean there's opportunity?

Bombardier certainly thinks so. Even before Boeing made these comments, Bombardier launched the C-Series airplane in 2008. This airplane will seat between 100 and 140 or so, depending upon configuration, and it will be the only real competitor in that size market. Why is that?

Over the last several years, there hasn't been much demand in this segment, especially at the lower end. Boeing and Airbus have airplanes that try to compete, but airlines haven't been as interested because the costs per seat are much higher than the larger birds.

Bombardier, however, is using new engine technology for its airplane that will effectively, they say, provide those larger airplane per-seat costs in a smaller airframe. If it all comes together, it could be a winner, but it's not a guarantee. So far, the only substantial orders are from Lufthansa in Germany and Republic (parent of Frontier) here in the US. Note that Lufthansa has ordered the new Airbus as well as the C-Series so it sees them as being in a different market.

Let's say there is a market at the low end here. Will airlines really want to buy an airplane in this segment that doesn't have commonality with airplanes in larger segments? Part of the allure of buying all airplanes from Boeing or Airbus is that there is a fair amount of commonality between airplanes, especially those in the same family like the 737-700, -800, and -900 where it's almost complete commonality. Bombardier doesn't have that, but it's now going to try.

Bombardier and Comac will be coming together to partner on their upcoming airplane projects.

Comac is working on the C919, an airplane that will compete with Boeing and Airbus in the 160 to 190 seat market. The deal with Bombardier will see the two work together to try to create commonality between the aircraft. That can provide real opportunity for the two to sell an entire family of airplanes that make them more attractive to airlines.

It takes a lot for an airplane to succeed in the market. Look at Airbus which endured years of insanely-low priced airplanes to break in. Does this have the same chance? Sure, and possibly more because of one five-letter word. China.

China is a huge up-and-coming market, and demand will only continue to grow rapidly in the country. Comac and Bombardier are positioning themselves to take full advantage, if the airplanes can perform as advertised. They aren't going to be the top global sellers anytime soon, but the framework is being built for real opportunity.

We'll have to check back in 20 years to see whether this post makes sense or not, but had someone said the same thing about Airbus in the 1970s, people would have laughed just as hard. As crazy as many things may sound, nothing is too crazy for this industry.

[You can continue to follow Brett on his consumer-focused airline blog at]

Photo via Bombardier Aerospace
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