1. Industry Overview: Global Duopoly Pattern and Domestic Breakthroughs

1.1 Definitions and Classification

Definition of a large aircraft

: Transport aircraft with a total take-off weight of ≥ 100 tons, including trunk passenger aircraft (narrow-body/wide-body) with more than 150 seats, military transport aircraft and special aircraft.

Narrow-body airliners

(Single aisle, carrying 150-200 passengers): accounting for more than 70% of the world's total, the core models include Boeing 737, Airbus A320, and COMAC C919.

Wide-body airliners

(Dual-aisle, carrying 250-400 passengers): representative aircraft Boeing 787, Airbus A350, COMAC C929 (under development).

1.2 Global Market Structure

Duopoly

In 2023, Boeing and Airbus will deliver a total of 1,263 aircraft (528 Boeing and 735 Airbus), with a market share of 92.5%.

Airbus' advantage expands

After the grounding of the Boeing 737 MAX in 2019, Airbus' market share increased from 51% to 58% in 2023.

Regional distribution

1.3 Chinese market: policy-driven domestic substitution

Fleet size

By the end of 2023, China's civil aviation transport fleet will have 4,270 aircraft, with narrow-body aircraft accounting for 76.7% and wide-body aircraft accounting for 11.1%.

Shanghai Lingang Plan in 2024

In 2026, the target large aircraft industry scale is 80 billion yuan, and the localization rate will be increased to 90%.

R&D subsidy

The C919 project has received a total of more than 20 billion yuan from the national special fund and more than 5 billion yuan of local government supporting subsidies.

Localization rate

The current localization rate of C919 is 60%, and the goal is to reach 90% by 2027 (95% of the airframe, 50% of the engine, and 70% of the avionics system).

2. C919: Technological Breakthrough and Commercialization Process

2.1 Development history and technical parameters

Key Milestones :

Comparison of technical parameters:

2.2 Orders and Delivery

Order distribution

(As of February 2025):

Delivery target for 2024: 50 aircraft (16 aircraft actually delivered, production capacity ramp-up).

Target production capacity in 2027: 150 aircraft/year, with a cumulative delivery volume of more than 300 aircraft.

2.3 Progress of international airworthiness certification

European EASA

: The technical assessment will start in June 2024, and the certification is expected to be completed in 2026.

U.S. FA

: The shadow review will be launched in 2025, and the airworthiness certificate may be obtained in 2028.

Southeast Asian market

: It has signed a memorandum of cooperation with Garuda Indonesia and Malaysia Airlines, and plans to operate flights in 2026.

3. Industrial chain analysis: domestic substitution and global cooperation

3.1 Manufacture of the body

Percentage of value

: 40%-50%, with the highest localization rate (95%).

AVIC West

　　（000768. SZ): Supply wings and mid-fuselages, accounting for 35% of the value of the C919 fuselage.

AVIC Shenfei

　　（600760. SH): Rear fuselage, vertical tail, accounting for 25%.

Composites

: C919 uses 12% carbon fiber (Toray T800 grade of Japan), and domestic T800 has been verified (Guangwei Composites, Zhongjian Technology).

3.2 Power system

Status quo

Relying on the CFM international LEAP-1C engine (a joint venture between the United States and France), the domestically produced CJ-1000A is expected to be installed in 2030.

CJ-1000A parameters

The thrust is 13 tons, the fuel consumption is 5% lower than that of the LEAP-1C, and the R&D investment exceeds 15 billion yuan.

Suppliers

:Hangfa Power(600893. SH), Chengfa Technology (600391. SH) involved in compressor components.

3.3 Avionics and Airborne Equipment

Localization progress

3.4 Material Supply Chain

Titanium alloy

:Baoti Co., Ltd. (600456. SH) supplies C919 titanium accounting for 60%, with a unit price of 80-1.2 million yuan/ton.

Aluminum-lithium alloy

:Nanshan Aluminum(600219. SH) broke through the third-generation aluminum-lithium alloy plate, reducing weight by 7%.

Carbon fiber

: Zhongfu Shenying (688295. SH) T800 grade products have been verified, with an annual production capacity of 22,000 tons in 2024.

4. Core Enterprise Analysis

4.1 AVIC West (000768. SZ）‌

Business Highlights

: The core supplier of C919 wings, the revenue of the aviation business in H1 2024 is +32% year-on-year, and the gross profit margin will increase to 18.5%.

Capacity planning

: The Yanliang base in Xi'an will be expanded, and the production capacity of airframe parts will match 100 aircraft per year in 2025.

4.2 Aviation engine power (600893. SH）‌

Technological breakthroughs

: CJ-1000A completed the high-altitude platform test, and will receive a special national subsidy of 1.2 billion yuan in 2024.

Business outlook

In 2025, the proportion of military revenue will drop to 60%, and the civil aircraft business will become the second growth curve.

4.3 Guangwei Composites (300699. SZ）‌

Card position advantage

: T800 carbon fiber has passed the certification of commercial aircraft, and the proportion of civilian revenue will increase to 35% in 2024.

Expansion plan

: The Baotou base in Inner Mongolia will be put into operation in 2025, and the cost will be reduced by 20%.

5. Risks and Challenges

5.1 Technical bottlenecks

Risk of engine outage

: If relations between China and the United States deteriorate, the supply of LEAP-1C may be limited (alternative: accelerate the development of CJ-1000A).

Airworthiness certification delay

: European and American technical barriers may extend the international delivery cycle of C919.

5.2 Market Competition

Airbus A320Neo price reduction

: In 2024, the company will launch a "flexible payment plan" for the Chinese market, and the unit price will be reduced to $105 million.

The Boeing 737 MAX returns

: In 2023, China will return to fly the 737MAX to compete for the share of narrow-body aircraft.

5.3 Cost pressure

Insufficient scale effect

: The current cost of the C919 is about $120 million per unit (the target is to be reduced to $90 million by 2027).

Supply chain management

Global inflation has pushed up the prices of aluminum-lithium alloys and titanium, and the cost of raw materials will rise by 15% in 2024.

6. Future outlook: from C919 to C929

6.1 Progress of C929 wide-body airliner

Technical Parameters

: 280-seater, 12,000 km range, 50% composite materials, first flight planned in 2030.

International cooperation

: Jointly developed the PD-35 engine (thrust 35 tons) with Russia, and the core engine test will be completed in 2024.

6.2 Market size forecast

Chinese demand

From 2023 to 2040, it is expected to add 4,200 narrow-body aircraft (valued at USD 450 billion) and 1,100 widebody aircraft (valued at USD 330 billion).

Global share

In 2035, the C919 aims to occupy 15% of the global narrowbody market (200 aircraft delivered annually), and the C929 targets 5%.

(Redirected from: Little Doctor of Finance).