UAC Denies Media Reports on CR929 Sales Dispute with COMAC

 - April 20, 2019, 11:43 AM
Russia's United Aircraft Corp. is contesting news reports that friction between it and partner COMAC of China is threatening the future of the development program for the widebody C929 airliner. (Photo: Vladimir Karnozov)

On Friday, April 19, United Aircraft Corporation (UAC) issued a statement flatly denying recent media reports about the CR929 widebody airliner program coming under threat because of alleged disagreements between the Russian and Chinese program participants about sales management.

The statement reads, in part: “China did not offer Russia to distribute sales on the CR929 program. UAC and COMAC do not plan negotiations on that matter. Sales of these airplanes are one of the major responsibilities for CRAIC (China-Russia Commercial Aircraft International Corporation), a joint venture established by the parent companies. UAC does not consider giving up the current parity partnership and investment sharing on the CR929 effort. The principles of equal rights, responsibilities, and mutual interests of the two sides are forged in the government-to-government agreement signed in 2016. According to it, the Engineering Center, a 100 percent daughter company of CRAIC, shall be created to manage CR929 design and development. Right now, the two parent companies are working with Russian and Chinese certification agencies in order to determine the best certification strategy from the viewpoint of the project commercial efficacy.”

In addition to that statement, Russia’s ministry for industry and trade announced a forthcoming visit to China of deputy minister responsible for civil aviation Oleg Bocharov and UAC president Yuri Slyusar. When in Beijing, they will talk to the hosts on various matters, including issues relating to “ways of cooperation” on the CR929.

The gist of reports in the Moscow media involves how sales would be managed. Allegedly, Beijing wants to place serial products with local carriers independently, while offering that Moscow would do the same in the domestic market and to the third countries. If events go that way, it would be a major departure from earlier agreed principles for the project that is now in its early phase, during which outward appearance shall be determined, and major supplies selected.

According to agreements already reached, UAC shall provide investments worth 600 billion roubles to meet its program obligations—a sum exceeding all other ongoing programs in Russia. The manufacturer needs to make sales into China to make ends meet, since that part of the global market is expected to generate sales of 1,200 aircraft over 20 years starting in 2026, compared to merely 50-to-120 to Russian carriers. At Airshow China’2018, COMAC/CRAIC estimated the global market for the CR929 at about 800 units.

Besides the point being disputed is who will hold the type certificate, a Russian or a Chinese entity. Both Moscow and Beijing want a local company to do so.

The CR929 project commenced in 2016, after СОМАС and UAC agreed on equal rights and risk sharing in the respective effort. At that point, the project was estimated at U.S. $20 billion, including 13 billion on R&D and the reminder on aftersales support and sales stimulus.