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Boeing Partners With China Challenger Comac on Energy Research

Boeing Co. (BA) will work with Commercial Aircraft Corp. (CACOFZ) of China on fuel-efficient technologies after forming a partnership with a planemaker that’s mounting a challenge in the world’s fastest-growing aviation market.

A jointly funded research center in Beijing will study ways to pare fuel use and emissions, the companies said today in a statement, which didn’t specify the size of the investment. Boeing and Shanghai-based Comac also said they will have annual leadership meetings and exchange market forecasts.

The tie-up will bolster Boeing in China and may also help Comac develop the C919, the nation’s first large passenger jet and a competitor for Boeing’s 737. With most fuel-efficiency gains driven by engine makers, Boeing’s deal with Comac will probably focus on “less-secretive ways” to boost performance, said Richard Aboulafia, an analyst at consultant Teal Group.

“Why not do it with someone who’s going to kick in money and someone who’s in one of the most important markets for your jets anyway?” said Aboulafia, who is based in Fairfax, Virginia.

Boeing’s research deal won’t affect Bombardier Inc. (BBD/B)’s talks with Comac on finding shared features between the C919 and Bombardier’s planned CSeries, said Haley Dunne, a spokeswoman for the Montreal-based company’s aerospace unit.

Bombardier-Comac Timeline

“We’re hoping to announce a deal soon,” Dunne said. “I can’t really give you a time on that. We are in discussions with them and the discussions are progressing very well.”

Boeing fell 2.1 percent to $72.56 at the close in New York and Bombardier tumbled 4.3 percent to C$4.05 in Toronto, joining a retreat by North American stocks after a report showed Europe’s economy contracted. Comac is state-owned.

China will need to buy 5,000 new planes through 2030, according to Chicago-based Boeing. Airbus SAS, the world leader in global jetliner sales ahead of Boeing, opened a production line in the country in 2008.

The Boeing-Comac technology center “shows that two companies in a competitive industry can partner to make progress on important challenges that cannot be solved by one company alone,” Jim Albaugh, Boeing’s commercial-aircraft chief, said in the statement. “That is good for customers and passengers, and it’s the right thing to do.”

Comac’s C919 is due to make its maiden flight in 2014 before entering service two years later. The company’s ARJ21 regional jet is running more than four years late. Calls to Comac’s media office went unanswered.

To contact the reporters on this story: Jasmine Wang in Hong Kong at jwang513@bloomberg.net; Brendan Case in Dallas at bcase4@bloomberg.net

To contact the editors responsible for this story: Ed Dufner at edufner@bloomberg.net; Neil Denslow at ndenslow@bloomberg.net

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