Honeywell Eyes US$15 Billion Opportunity on COMAC's C919

Though China's C919 has had its peaks and valleys, Honeywell president for Aerospace Asia Pacific Briand Greer remains bullish on opportunities for long-term value in its involvement in both.

Honeywell's partnership with the Commercial Aircraft Corporation of China (COMAC) C919 program represents a US$15 billion opportunity for the U.S. company, its top regional aerospace official told AIN in the run-up to the Singapore Airshow.

"It's going to be a great aircraft. If you read deeper into the aircraft, it will be very competitive with the aircraft that are flying right now," said Briand Greer, president, Honeywell Aerospace Asia Pacific. "It's not old, but current, technology."

COMAC's efforts to develop a domestic aircraft to take on the market's dominant narrow-body players, the Boeing 737 and the Airbus A320, have faced repeated setbacks. Despite delays, the arrival in November of a prototype represented new progress.
Honeywell joined the project in 2010, when COMAC invited it to provide four essential components, "including flight control systems, wheels and brakes, auxiliary power units, and navigation systems," the company said.

Honeywell also offered engineering and training support to COMAC to improve the safety, reliability and operational efficiency of the C919. "It's the first big thing they have done where they are aiming to be Western-certified," he said.

Greer conceded estimates for the C919's entry into widespread service in 2018-20 were optimistic, saying it was probably more realistic to look at 2025-30.

"They have 400 orders for the aircraft right now, mostly within China. If you look at what's going to happen in terms of China's airports overall, demand for single-aisle [aircraft] is quite remarkable. In the last 10 years, the number of aircraft in Asia grew from 3,000 to 6,000. In the next 10 years, it will see 7,000 more."

The Civil Aviation Administration of China plans to help domestic and foreign airlines open more than 200 international routes in 2016. Last year, Chinese travelers took 120 million international trips, a year-on-year increase of 16 percent.


ARJ21 Delays
Honeywell is also a key contributor to another delayed Chinese aircraft program, the ARJ21, a regional twin-turbofan, which saw the first aircraft delivered to launch customer, Chengdu Airlines, also in November.

Honeywell helped develop, produce and support the primary flight control system for the aircraft. The airline hopes to put the ARJ21-700 into commercial operation in early 2016 on routes from Chengdu to Beijing and Shanghai. Honeywell said COMAC had already received more than 300 domestic orders for the aircraft.
Airport development is also an important sphere for Honeywell. In 2016, Greer said China is spending US$11.7 billion on airports and civil infrastructure.

This year, it plans to open 10 new airports, including a second in Beijing, and to upgrade 50 more. In the next five years, China will build 66 new civil airports, increasing the total number 32 percent to 272.

Defense
Greer said that defense is also an important area for the company in the Asia Pacific region. Honeywell supports defense platforms including the C130 transport, F-15 fighter and CH47 Chinook helicopter.
"Many of the defense budgets throughout Asia [other than China which is fast-growing but inaccessible for U.S. companies] are growing. The countries here realize that their economic future is tied to China. From a military perspective, new aircraft or upgrades are a huge opportunity for us."
Honeywell's latest Global Business Aviation Outlook gave a bleak assessment of the BRIC market, saying: "Slight improvements in Chinese and Russian purchase plans compared with last year are not enough to support an improved overall BRIC outlook."
Greer prefers to play down the short-term malaise. "This will be the fastest-growing market for business and general aviation for many years to come. All of the things in the West we have known for a long time have simply not existed here."

Data-Driven Future
Aircraft flight efficiency and optimization is an important area for Honeywell also. An aircraft generates 1terabyte of data on a single flight, which can be used to optimize flights and send information to the MRO base waiting to service the aircraft.

"All of this information around productivity between systems will rewrite the book on being proactive with prognostics," Greer said.

He added that 10 percent of Honeywell's 12,000 China-based employees work in aerospace. He is based in China and said he spends "50-60 percent" of his time there.
In terms of technology, recent data show that more than 4,000 companies are incorporated in China every day. "That shows you again [China's growth] from a scale perspective," said Greer.

"My personal view is that China is not a house of cards. They have some difficult things to deal with in terms of government investment, manufacturing and consumption. Sure, that's a very difficult thing for economies to do. If anyone can do it, it's China. Like it or not, the government has the ability to turn the ship very quickly," said Greer.

He said all the most important businesses were part of the [ruling Communist] party, meaning things could be done more quickly than anywhere else in the world. "Growth may be 'only' 7 percent or 6 percent, but it is still the second-largest economy in the world - it grew more in one year than entire size of the Mexican economy. Though growth is down, it is still very significant in many areas. We still see very robust aviation demand growth."