Maker of China’s C919 receives capital injection amid supply chain challenges

China’s leading aircraft manufacturer, determined to carve out a share of the lucrative but technologically complex civil aviation market, has obtained a timely round of financial support from its state backers, greatly expanding its registered capital as the firm aims to overcome a production bottleneck and remount its challenge to the Boeing and Airbus duopoly.

As competition from the two Western giants for contracts heats up amid a supply chain crunch that has slowed turnaround rates for the state-owned Commercial Aircraft Corporation of China (Comac), the Shanghai-based firm received a huge capital injection of 44 billion yuan (US$6.2 billion) from its stakeholders this week, boosting its total registered capital by 88 per cent to more than 94 billion yuan.

Analysts said more resources are needed for the Chinese planemaker to overcome headwinds and ramp up production.

The latest round of fundraising for Comac, maker of China’s indigenous C919 and C909 narrowbody airliners, was led by the State Council’s State-owned Assets Supervision and Administration Commission, whose ownership stake increased to 53.08 per cent after the infusion.

Among the shareholders who committed new capital in exchange for a larger Comac stake were several of the country’s state-owned industrial giants, namely the Aluminium Corporation of China, China National Building Material Group and China Electronics Technology Group.

The infusion serves as a vote of confidence in the planemaker, said Jason Zheng, an analyst with Shanghai-based aviation consultancy Airwefly.

South China Morning Post