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blank 11/20/09 09:41AM ARJ21, Boeing, Chines Aircraft, COMAC, FAA, Obama SUpports Chinese Aircraft

Chinese Jet Gets Boost From Obama
Lets Boost the US Aircraft Makers First!

One of the few concrete signs of cooperation to emerge from this week's U.S.-China summit could boost Beijing's drive to become a global aircraft maker.

President Barack Obama pledged Tuesday to push for closer technical collaboration and eventual U.S. safety approval for China's ARJ21 commuter jet. That amounts to both a symbolic and practical step to counter Beijing's growing frustration with U.S. aviation policy and U.S. restrictions on the purchase of certain technologies.

Chinese ARJ21

              China's ARJ21 passenger jetliner

The high-profile U.S. initiative is especially significant because China's own safety regulators are still a year or more away from approving the 70-to-100-passenger aircraft being developed by Commercial Aircraft Corp. of China Ltd., or Comac.

But signaling Washington's desire to provide technical support and regulatory certainty down the road also raises questions about both the overseas role and the independence of the U.S. Federal Aviation Administration, which has taken more of an arm's-length approach toward certifying the safety of China's future airliners.

Over the years, the FAA has forged close ties with Chinese carriers and aviation regulators through a multitude of joint safety efforts, data sharing and training programs. Hundreds of Beijing officials, airline managers, pilots and controllers have visited their U.S. counterparts. Partly as a result, the country's commercial-aviation accident rate—China has gone nearly five years without a major fatal crash—is by some measures better than that of the U.S.

But when it comes to regulatory approval, the FAA has tried to maintain greater distance. Before Mr. Obama's announcement, for example, FAA representatives in China pulled back from helping Comac teams developing the ARJ21 because of concern that such assistance might be considered a conflict of interest when other parts of the agency gear up to determine whether the plane meets U.S. safety standards. Nearly half the plane's parts come from the U.S. An FAA spokeswoman declined to comment on President Obama's announcement or what it means for future FAA steps.

So far, Western interest in buying the ARJ21 has been limited. At the Zhuhai air show in southern China last year, Comac announced that its first overseas order had come from General Electric Co. GE, which is supplying the engines, agreed to buy five of the regional jets with an option for 20 more, in a deal that could amount to $750 million. But GE also said that it planned to lease all the planes inside China. FAA certification is critical if Beijing hopes to attract other foreign buyers, and some U.S. officials predict it could take as long as two years. Currently undergoing flight tests, the plane has taken about twice as long to develop as its backers initially projected.

In some ways, however, the current discussions may be more of a prelude to broader commercial and regulatory cooperation on a larger Comac-designed jet, the more than 160-seat C919. Slated for certification no earlier than 2016, that model would compete directly with the two leading global airliner suppliers, Boeing Co and Airbus, a unit of European Aeronautic Defence & Space Co. Though still in early design, Chinese officials have said the C919 should have operating costs 10% below those of comparable Western jetliners

Safety and business considerations aren't the only reason for U.S.-Chinese friction over aerospace collaboration. Honeywell International Inc. has struck a tentative deal to provide avionics and terrain-avoidance warning systems to Chinese customers. But one glitch, according to Honeywell officials, is that Chinese authorities insist that the updated digital maps Honeywell sells outside China can't include data about sensitive facilities and man-made obstacles throughout the country.

Write to Andy Pasztor at andy.pasztor@wsj.com and Norihiko Shirouzu at norihiko.shirouzu@wsj.com





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