China and Japan: Is the AIRBUS-BOEING DUOPOLY in danger? - VisualPolitik EN

the aviation sector is not exactly the most competitive sector in the world basically two companies dominate the market Boeing and Airbus two heavyweights two giants that control more than 90% of all aircraft sales worldwide we are talking about a sector which is also expanding rapidly as In this graph you can see that over the next 20 years the number of air passengers is expected to grow at a rate of around five percent each year and, between this growth and the need to replace old fleets, forecasts suggest that over the next two decades at least 39,000 new aircraft will be needed, it is a huge demand that will largely come from developing countries and don't forget what we already told you in a previous video that I will link In the description, the aviation sector of the future is going to change.

In the coming years many of the so-called dense routes based on gigantic hubs will be replaced by new, thinner routes by direct routes with longer flights operated by smaller aircraft and that change along with increasingly demanding environments or regulations, explains why Airbus and Boeing are in the process of adapting to these new paradigms but let's not get distracted, the fact is that much of this promising future is particularly focused on Asia and I am not just referring to China but also other stakeholders who are already making a strong impression watch this sweepers can afford to fly India opens 34 airports in 18 months as aviation market booms The Washington Post But here's the question: what does it all really mean, given the juicy growth forecasts in the aviation sector, the growing importance of smaller companies? planes and the emergence of China as a technological and economic power, we are now beginning to see some companies that want to become the new players in the aeronautical industry, that is, there are relevant manufacturers that are committed to competing with the largest, the question is all Did they manage to achieve it or will it be just one more frustrated attempt in this video we are going to tell you the news in the world of aviation so listen in the aviation sector we find two important news on the one hand The emergence of China in the aeronautical industry adds to the demise of the old regional aircraft manufacturers, but this time let me start at the end and tell you what happened to Bombardier and Embraer, the two largest manufacturers of small commercial aircraft in the world, and the facts: Canada's Bombardier with More than 1,800 aircraft are built in the CRJ series and the Brazilian Embraer even more, about 2,700.

In this way, between the two companies, they have controlled most of the regional aircraft market in the world in recent years, however it has not been easy. For them, during this period, both Bombardier and Embraer have had serious difficulties in reinventing themselves and adapting to a mature market that is very different from the one that existed when these companies began to exploit their business, that is, their planes simply stopped selling well and the companies They found themselves financially crippled while making titanic efforts to keep up. To date we will see the reason later but for now let's continue with our story the blow was especially hard for Bombardier which saw its star program the CRJ series that came into operation in the 1990s ending in collapse with losses of approximately 600 million dollars in 2018 The Brazilian embryo also began to lose money around 180 million dollars in that year alone and of course these financial blows added to the growing pressure from Airbus and Boeing to control the regional aviation segments and thus get rid of the few competitors that still remain.

They created the ideal scenario for the big fish to swallow the little ones. Airbus took the first step by announcing the purchase of the CSeries program, the latest aircraft model developed by the Canadian Bombardier, and shortly after, Boeing announced its merger with the Brazilian Embraer, a merger. or rather a purchase that is scheduled to be completed this year 2020. Airbus took over and renamed the Canadian plane that Boeing tried to keep out of the US. Business Insider Embraer soars in South Paulo as Bolson Arrow approves the agreement with Boeing Bloomberg did you now think that the changes in the aviation sector would end here?

Although nothing could be further from the truth, in fact, this was just the beginning. Any ideas about where the main action will take place. will take place exactly, I am sure many of you have already guessed, it is of course China, our China with its fingers in almost all the pies, but it is not only about the great Asian giant, it is also about its neighbor Japan, which is gaining a little. However, these two cases represent two models and two very different ways of doing things. On the one hand, we have the Chinese state-owned manufacturer Commack, which is trying to compete directly with Airbus and Boeing in the short and medium-haul aircraft market.

This is a really consolidated market in which we are trying to compete, it is a challenge that requires true business audacity and on the other hand we have the Japanese Mitsubishi Heavy Industries, a wing of the former Mitsubishi Ambar that today is dedicated to the construction of ships. , airplanes, and large industrial assemblies like nuclear reactors, but wait a minute, is it realistic for these companies to start competing from scratch in 2020? Do they really have enough capacity to develop aircraft capable of competing with the fleets of two aviation giants because, at the end of the day? If Boeing is having so many difficulties with its Jynx 737 max project, a topic that we discussed in a previous video, imagine how much more complicated it must be to start practically from scratch and the best example is probably the case of the Mac carry from China that you want.

We know how they are doing. things to the Chinese and what we can expect from this risky company. Listen to this Cormack bogged down by local ambition. If there is one

danger

common to any business venture, it is that sometimes aiming too high can mean shooting yourself in the foot. Before you have even started and this is precisely what could be happening with Commack, let me explain to you that to date the Chinese state manufacturer has introduced two different aircraft models, the arj21 and the c919, the first of these co max AR j21 It is a 90-seat plane.

For regional routes After a decade of delays in commissioning and six years between the first test flight and its eventual entry into the market, the ARJ21 is already taking to the skies with some Chinese airlines, in fact, there is currently little else of 20 aircraft in service, the problem is that with so many delays and such slow developments the plane is already obsolete, that is why the markets of the United States and Europe consider it much more inferior than the regional aircraft manufactured by Bombardier and Embraer and it happens The same with the latest and largest model, the c919, a medium-haul plane with capacity for almost one hundred and seventy passengers that aims to compete directly against the current kings of the skies, the Boeing 737 series and the Airbus, the A320, however, the reality is which seems an almost impossible mission for this aircraft to even obtain certification from aviation safety agencies such as the United States FAA or the European EAS.

Of course, this is a fundamental requirement for the ship to fly in both regions. The design, development and manufacturing of aircraft is one of the most complicated tasks there is. It takes an average of five years for Boeing and Airbus as new models to be certified by aviation safety agencies to imagine what the term could be for a Chinese model manufactured by a company with no established track record or reputation. Today, the C919 is in a very complicated situation. difficult position since it may never be certified by either the United States or Europe and that is the reality, in other words, faced with the situation, one thing seems certain.

The Chinese manufacturer Accomack has the opportunity to get ahead and compete against Boeing and Airbus, but only in China and perhaps with a little fun in an Asian or African country, that is, on a global level, American and European manufacturers will be able to sleep quiet at night at least for a few years, so now let's move on to Japan to see what happens with Mitsubishi's greatest aviation adventure, which we mentioned at the beginning of this video, apparently the Japanese have chosen a much safer path and with fewer obstacles. Japan's return to the aviation race if mr. bushy highlights that something in his desire to fully enter the aviation market is to be much more cautious and perhaps also more intelligent and, as you will see, in the aeronautical division of Mitsubishi Heavy Industries they do not waste time with small coins in addition to spending a whopping seven billion dollars developing their own models of that series of spaceplanes they have also spent purchasing the Bombardier xyq Onix CRJ program that we talked about at the beginning of the video, it probably all makes a little more sense now that Airbus bought The Series C. program is a vicious or an opportunity in Bombardier's CRJ program and secured it for $550 million.

In this way Bombardier, one of the largest industrial groups in Canada, completely got rid of its commercial aircraft business, which was a real money-losing machine, while Mitsubishi achieves a double objective in one. On the one hand, it will be in charge of maintaining the hundreds of CR Js that fly around the world and on the other hand, it will position itself as the natural substitute for these aircraft when companies need to renew their fleets and this is precisely how the Japanese company hopes to present its series of aircraft. Spaces worldwide, this series is already in its final phase of development after having made nearly 900 modifications to adapt to the requirements of the United States FAA.

Take note of this very important detail. Mitsubishi has prepared two versions of this model. one of them the main one for eighty-eight passengers and another a little smaller for seventy-six and this is not a trivial move in fact it is a decision that makes a lot of sense but why the hell is the small version so important? Well, once again, we return to regulations and limitations that are generally not difficult to understand because they are the result of political negotiations where the public interest takes a backseat and, as you will see, for these rules to make sense, we must first know a couple of things that American law prohibits foreign airlines from operating domestic flights in its territory, that is, the USA.

The aviation market is protected and reserved exclusively for American airlines and, secondly, of course, This ban also includes regional flights and how is a regional flight properly defined? It is a flight that connects one of the main airports, the really important ones, like New York's JFK and George Bush airport. at Houston or Los Angeles International Airport with other small airports, that is, with small airports that do not have much passenger demand and are operated by small aircraft and there are hundreds and hundreds of these regional local airports throughout the United States and the question is that these regional airports flights are normally operated by subsidiaries and franchises of large airlines such as American Airlines or United why because these subsidiaries are not subject to the same labor agreements that affect the large airlines, that is, they have different working conditions and lower salaries and it is Precisely for this reason, to prevent the large airline companies from subcontracting too many routes and traffic, the unions agreed with the large airline companies that the routes operated by these subsidiaries can only be operated with airplanes with a maximum of 76 seats and 86,000 pounds of weight, that is, , smaller planes than current market conditions would require, therefore if large airlines want to use larger planes with more than 76 passengers, they will have to operate the routes directly themselves, so the unions protect the jobs of the employees of these large companies that, as we have already said, you are subject to more generous labor agreements and yes, we are talking about the United States, not Argentina, here you see that things can get complicated everywhere, the The fact is that it was for this reason that Mitsubishi vitally continued to take over the CRJ program as well as developing a smaller and even lighter version of its original, rather clever aircraft.

What do you think? In fact, this is what allowed Mitsubishi to secure its first confirmed orders from American companies, specifically 160 aircraft, and if we add the other orders from Japan and other countries, the model seems to be popular despite having been developed by a company which has never built a commercial aircraft on its own before, but it's not that simple, the launch was not without problems, it is actually plagued with delays, to give you an idea. The Japanese company's initial idea was to put the plane into service in 2013, but with all the design modifications it has had to make to obtain FAA certification, the delays have been continuous and prolonged, in addition to the slowness ofthe Japan Aviation Safety Agency itself, jcav, to certify the model.

It does not help them meet the deadlines as they are today. Entry into service is scheduled for 2021 after the last delay announcement at the end of 2019. All of this has increased the development cost of the space plane program from $5.5 billion to more. of 7 billion, as I said, developing an airplane from scratch is not cheap, fast or easy, now you have weapons with all this information. What do you think is threatening the

duopoly

of Boeing and Airbus? Is the arrival of new competitors feasible in the future given how complicated it is? to develop a commercial aircraft, can Commack be an alternative to traditional manufacturers in China and other parts of the world?

I'll leave your response in the comments below and I really hope you enjoyed this video. Hit the like button if you did and don't forget to subscribe for new videos. Also check out our friends at the Reconsider Media podcast, they provided the voices in this episode that weren't mine and as always thanks for watching if you want to learn more about politics and world affairs and here's some more of my lovely voice, come watch the reconsidered podcast where we don't think for you, reconsider ww re consider mediacom or on Apple or Google Play or your favorite podcast