Introducing Comac, China's answer to Boeing and Airbus

The company, whose shareholders include the Chinese government, has taken its first major orders--and plans to duke it out with aerospace giants on its own turf.

If you're in charge of purchasing or leasing aircraft for a major airline, your options are pretty limited. You can go with America's home team, the venerable and truly massive Boeing. Or you can go with Airbus, the French-based company whose planes account for around half of the world's commercial fleet.

But as the world sits on the brink of a new and potentially massive surge in demand for airliners, particularly in the developing world, a new company has sprung into view, with naked ambitions to take business from the aerospace powers that be. Not only is it well funded and deep into the design stages of its first commercial airliner, which will debut in 2016--it's already taking orders for hundreds of planes.

To top it all off, it's based in a country long overdue for a commercial air travel revolution, in a region that Boeing itself has claimed will account for half of the world's new air traffic in the next 20 years. Meet Comac, China's soon-to-be aerospace powerhouse.

The company is expected to announce its first orders for commercial airliners at the Zhuhai Air Show, which, as reported by Bloomberg News, are expected to number in the hundreds.

What, exactly, are companies committing to with Comac? For a flagship product, it's somewhat tame: The Comac C919 is a narrow body airliner, cast in the (rough) mold of popular domestic jets like the Airbus A320 and the Boeing 737. It will seat 160 passengers, most of whom aren't likely to notice the difference between this plane and the last one they flew on.

To be clear, though, Comac isn't aiming to out-innovate its competitors, at least for now. With the help of the Chinese government, its boosters hope to make a dent in the worldwide airliner market, and with any luck, own its growth in China, India, and the rest of the Asia Pacific area.

Single-aisle aircraft already account for a staggering 11,580, or 61%, of the world's jet fleet, numbers that Boeing expects to rocket to 25,000 and 69% by 2029. For the C919's construction, Comac has called on contractors domestic and foreign, including Honeywell, GE and Eaton Corporation. In fact, American contractors building parts for Comac currently outnumber Chinese contractors, especially when it comes to more complicated parts like engines and hydraulics systems. In due time, Comac plans to shift more of its manufacturing load to domestic companies.

In other words, in both strategy and plane design, Comac is acting with pure pragmatism. It's aiming straight for a soft, expanding market with a plane that will share many parts--and in theory, most capabilities--with some of the most popular aircraft in the world, seeking differentiation by price, not technology. (Comac hasn't publicly discussed pricing for the C919, but its expected to be low. The company's first aircraft, a small regional jet, retailed for about $20m, while its closest Boeing counterpart, the 717-200, cost about $40m while it was still in production.)

The C919 won't be carrying passengers until 2016, but lumbering companies like Boeing and Airbus, whose orders are delivered in years, not months, may start to feel the heat from their new competitor, very, very soon.

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