Guotai Junan: C919 production capacity is climbing, speeding up delivery. Domestic aircraft industry chain related listed companies are expected to continue to benefit.

Guotai Junan Securities released a research report stating that on August 28, Air China and China Southern Airlines simultaneously received the first C919 aircraft at the Commercial Aircraft Corporation of China (COMAC) assembly and manufacturing center in Pudong, marking the beginning of a new phase of multi-user operation for the C919 aircraft. The increase in C919 production capacity and accelerated deliveries will drive continuous benefits for related listed companies in the domestic aircraft industry. With the ramping up of production capacity for domestic aircraft in the future, advancements in flight frequency, flight times, passenger numbers, and routes will continue to progress. It is expected that China's C919 large aircraft will break the current industry oligopoly and deeply participate in global competition. The high-quality development of domestic aircraft, with increased production capacity and accelerated deliveries, is significant. The C919 large aircraft is China's first single-aisle jet airliner developed independently according to international airworthiness standards and with proprietary intellectual property rights. It can accommodate 158-192 passengers and has a range of 4,075-5,555 kilometers. As of August 2024, a total of 9 C919 aircraft have been delivered to customers. Among them, the C919 aircraft of China Eastern Airlines has been operating smoothly for 15 months since its commercial maiden flight, serving 5 regular routes, with over 3,600 commercial flights flown and 10,000 hours in flight. China Southern Airlines and Air China Limited signed orders for 100 C919 aircraft each with COMAC in 2024, while China Eastern Airlines placed another order for 100 C919 aircraft in addition to its initial order for 5 in 2021. In addition, Golden Phoenix Airlines under Hainan Airlines is expected to receive its first C919 aircraft in the fourth quarter of 2024 and gradually adjust its aircraft fleet to consist solely of domestic C919 aircraft in the coming years. Zhang Yujin, Vice President of COMAC, revealed in an interview that the number of C919 orders has reached nearly 1,200, and it is expected that the annual production capacity will reach 150 aircraft within 5 years. Domestic aircraft have the potential to break the monopoly and deeply engage in global competition. According to the Commercial Aircraft Corporation of China's Market Forecast Annual Report (CMF) (2023-2042), it is estimated that the global fleet of commercial aircraft will reach 48,455 aircraft by 2042, which is 2.2 times the size of the fleet in 2022 (22,028 aircraft). Over the next 20 years, approximately 43,644 new aircraft worth about $6.5 trillion will be delivered for fleet replacement and expansion, of which about 73.9% will be single-aisle jet airliners. Chinese airlines are expected to receive 9,171 of these new aircraft, with a market value of about $1.4 trillion. The commercial large aircraft manufacturing industry faces high difficulty, substantial capital requirements, long risk cycles, and high industry barriers, with the single-aisle aircraft sector currently dominated by Boeing (737 MAX series) and Airbus (A320neo). With the increasing production capacity of domestic aircraft in the future, advancements in flight frequency, flight times, passenger numbers, and routes are expected, allowing China's C919 large aircraft to break the current industry oligopoly and deeply engage in global competition.