COMAC's initiatives in Vietnam illustrate the state-owned company's shift over the past year towards a more strategic marketing approach aimed at regulators and airlines, as it strives to compete on a global scale with prominent Western manufacturers like Airbus and Boeing.
Following several months of negotiations, VietJet, Vietnam's leading private airline, was set to commence a short-term lease on January 15 for two C909 regional jets, which would be operated by crews from Chengdu Airlines in China, according to documents reviewed by Reuters that shed light on the company's strategy.
However, Vietnam's aviation authority has yet to approve the arrangement, exercising caution regarding the endorsement of an aircraft that is currently certified only in China and Indonesia, according to the two sources and an additional individual.
While Vietnamese media had reported on the lease, the delay in approval, VietJet's long-term plans for COMAC jets, and the manufacturer's efforts to secure regulatory endorsement—including the provision of attractive financial terms and training—had not been disclosed previously.
The C909, which was known as the ARJ21 until November, is China's first jet engine-powered aircraft to enter commercial production, having been in service since 2016 with approximately 160 units delivered to date.
Although the regional jet does not garner as much attention as COMAC's more sophisticated narrowbody C919, it represents a significant opportunity for the manufacturer to establish a presence in one of the fastest-growing aviation markets globally and enhance its profile beyond China in anticipation of increased C919 production.
It would also convey a message to competitors.
VietJet had been in discussions with a foreign lessor for several months regarding the rental of two E190 regional jets manufactured by Brazil's Embraer, the leading global producer of 90-seat aircraft, according to separate sources familiar with the negotiations. One source mentioned that pilots were in the process of being recruited for these aircraft.
However, reports from Vietnamese media indicated that the negotiations fell through late last year. VietJet aimed to utilize either the Embraer or COMAC aircraft to establish connections between Vietnam's major cities and the tourist destination of Con Dao, which cannot accommodate larger jets.
Two individuals knowledgeable about VietJet's discussions with COMAC stated that the financial terms offered by the Chinese manufacturer were exceptionally appealing, with one describing them as "too good to resist."
These individuals requested anonymity as the negotiations were not public.
VietJet, recognized as one of Asia's largest low-cost airlines with a fleet of approximately 100 Airbus jets and around 200 Boeing 737 MAX jets on order, chose not to provide any comments.
COMAC, along with Vietnam's civil aviation authority and Chengdu Airlines, did not respond to requests for comments.
CHARM OFFENSIVE
China and Vietnam share significant economic connections and have recently initiated cooperation in areas such as defense and transport infrastructure, which were previously considered unlikely due to a history of conflict between the two communist-run nations, which still occasionally experience disputes over South China Sea boundaries.
As it became evident that VietJet would not obtain regulatory approval in time to commence the C909 lease last week and take advantage of the upcoming busy Lunar New Year travel period, Chinese authorities seemingly initiated a charm offensive.
COMAC Board Director Tan Wangeng visited Hanoi last Wednesday, coinciding with a phone call between China's President Xi Jinping and Vietnam's leader To Lam, during which Xi emphasized the need for enhanced connectivity between the two nations, as reported by Chinese state media.
According to VietJet documents, regulatory and VietJet personnel are set to arrive at COMAC's Shanghai facilities on January 14 for a 10-day training program focused on C909 standards, operations, and maintenance.
The timeline for Vietnam to authorize the deal remains uncertain; however, following the Xi-Lam conversation, the Vietnamese government publicly announced its efforts to eliminate regulatory barriers to facilitate the operation of COMAC aircraft within the country.
Rob Morris, the global head of consultancy at Cirium, indicated that the leasing agreement might not require a comprehensive certification review of the C909 jets by Vietnam's regulatory body.
"As a result, I believe this agreement could potentially be finalized swiftly," he stated.
GLOBAL PLANS
VietJet's short-term lease of two COMAC jets is considered a minor transaction that industry insiders suggest lacks traditional commercial viability for a large low-cost airline.
Nonetheless, VietJet plans to eventually expand its fleet, potentially including routes to China, as indicated in a document dated December 17.
Discussions between VietJet and COMAC have included the long-term goal of incorporating C919s into their operations, according to a separate source familiar with the negotiations.
Currently, the C909 and C919 are exclusively operated by Chinese airlines, with the exception of one Indonesian carrier utilizing the C909.
Both aircraft boast strong safety records with no reported accidents; however, they have significantly fewer flight hours compared to competing models and have yet to receive certification from Western regulators.
In February, COMAC showcased its aircraft for the first time outside of China in Singapore, which included a stop in Vietnam, reflecting a shift towards greater public engagement beyond Chinese borders.
In January, GallopAir, a startup based in Brunei, chartered a China Southern Airlines C909 to the country as a temporary solution while awaiting certification from the national regulator, according to CEO Cham Chi.
In 2023, GallopAir placed an order for 15 C909s and 15 C919s, marking the first order of C919s from a non-Chinese entity.
COMAC has been actively engaging with airlines, regulatory bodies, and aerospace companies across Asia and beyond, expressing its intention to have the C919 operational in Southeast Asia by next year.
Currently, approximately 16 C919s are in service with Chinese airlines, and COMAC plans to manufacture 30 units this year.
While COMAC is working towards obtaining EU certification for the C919, the absence of regulatory approval for its aircraft from authorities outside mainland China poses a significant challenge for the company in gaining acceptance from international airlines.
Vietnam's regulatory body is keen to ensure that any approvals granted do not compromise compliance with foreign aviation standards, particularly those of the U.S., as indicated by two sources.