Commercial Aircraft Corporation of China, better known as Comac, on Sunday completed the final ground test of the country’s first big commercial passenger jet, the C919. Its first flight test is expected by the end of May. When the plane is finally delivered to customers, it will compete for sales with Boeing Co.’s (NYSE: BA) 737 and the Airbus A320 single-aisle, dual engine jetliners.

The C919 originally was scheduled for delivery to customers in 2013. That date has been moved to 2019 as the complexities of building a new airplane from scratch ran roughshod over the initial plan.

How this new aircraft will affect Boeing and Airbus ultimately depends on how quickly Comac can ramp up production once flight testing of the C919 is completed. Both companies expect to produce around 60 single-aisle planes a month within the next year or so, and a fair share of that production has been targeted for sale to Chinese carriers.

Airbus already has a final assembly plant for its A320 operating in China, and Boeing has developed plans to begin delivering 100 planes per year, beginning next year, from a Chinese assembly plant developed in cooperation with Comac. Airbus is also building a final assembly plant in China for its A330 dual-aisle plane. That plant is scheduled to open this September.

Airbus has said that China will need 5,400 new single-aisle planes over the next 20 years, and Boeing’s estimate is even higher: 6,330 new planes. For both companies, China’s expected demand represents about 23% of the total global market for single-aisles planes through 2035. Both companies also forecast global demand for around 28,000 new single-aisle planes through 2035.

At production rates of 60 a month, global demand could be filled by Boeing and Airbus, without any help from Comac. Any planes the Chinese maker builds and sells will only diminish sales from the two majors. As of last November, Comac reported 517 orders for the C919, but that could rise rapidly once production gets underway and delivery schedules are firmed up.

Is the C919 an existential threat to either Boeing or Airbus? Probably not. But Comac already has moved ahead with plans for a dual-aisle plane, the C929, illustrating just how serious the company — and the government, which owns Comac — are.

The competitive situation will take years to play out. But a third major player is about to enter the competition and that could change the rules and the outcome going forward.

Get Our Free Investment Newsletter

I have read, and agree to the Terms of Use

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.