Rise of the large aircraft sector: European Aviation Safety Agency completes test flights, C919 accelerates towards global expansion
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Recently, the European Union Aviation Safety Agency (EASA) completed its conformity flight tests for the C919, officially giving a core evaluation of “excellent performance, safe and reliable.” The domestically-produced large aircraft is expected to enter the global market. The large aircraft sector and dual-engine sector have performed outstandingly. China’s civil aviation industry is set to enter a period of accelerated development.
Which segment companies are competitive in this new cycle?
1. What happened? EASA’s high evaluation
The C919 large aircraft industry is fully accelerating, and a trillion-level inflection point has arrived. Recently, EASA completed conformity flight tests for China’s C919 and gave an official core evaluation of “excellent performance, safe and reliable,” marking the domestic large aircraft’s official entry into the global market.
Stimulated by weekend news, the large aircraft sector surged 3% on Monday.
Source: WIND
According to reports from the Ministry of Science and Technology, the domestically-produced C919 has accumulated over 1,000 orders. Using China Eastern’s procurement price of 653 million RMB per aircraft as a reference, this equates to a market size of over 650 billion RMB. Adding the maintenance and spare parts market, the total lifecycle market space nears one trillion RMB. With the CJ-1000A domestic aero engine entering mass installation in 2027, supply chain bottlenecks will be broken, and ramping up production capacity will accelerate performance realization.
China Aero Engine’s “Taihang 7” gas turbine innovation demonstration project, “Taihang 15” gas turbine innovation demonstration project, and “Taihang 110” heavy-duty gas turbine innovation demonstration project have successfully passed the National Energy Administration’s evaluation and acceptance.
2. Why is this important? A breakthrough super cycle
The global civil aviation industry faces a structural contradiction of “strong demand but supply lapses,” resulting in a historic strategic opportunity for the domestic large aircraft industry. Represented by the C919, China’s domestic aircraft, backed by sustained capacity ramp-up, proactive airworthiness certification progress, and a massive domestic market, have entered a critical phase of scaled commercial operation and industrial breakthrough. The growth logic of the large aircraft industry chain has shifted from “thematic investment” to “industrial trend realization,” with core driving forces including—
① Global aircraft shortages have opened a valuable entry opportunity for domestic models;
② The urgent need for independently controllable supply chains is expediting the localization process;
③ With mass production ramping up, the trillion-level full lifecycle market space will enter a period of performance realization.
Opportunities will unfold throughout the industry chain, especially in high-value, high-barrier segments such as materials, engines, and avionics systems, creating globally competitive core assets.
Source: Industrial Securities
Over the next 20 years, total new aircraft demand is expected to reach 43,500 units. However, supply is seriously constrained due to fragile supply chains (raw material and labor shortages) and Boeing’s ongoing quality crisis. In 2024, global aircraft deliveries are just 1,266 units, far below the peak in 2018, resulting in record order backlogs of 17,000 units and wait times for popular models approaching 10 years.
This is precisely the “golden window period” facing the C919. Commercial Aircraft Corporation of China (COMAC) predicts that by 2042, the global passenger aircraft fleet will reach 48,455 units, with demand from China reaching 9,969 units—accounting for 21% of the global total and becoming the largest single market with an estimated market value of $1.4 trillion. The C919 now has nearly 1,500 orders and is in regular commercial operation with China Eastern Airlines, Air China, and China Southern Airlines, carrying over one million cumulative passengers. Its ongoing airworthiness and operations progress in Southeast Asia, and EASA’s “excellent performance, safe and reliable” evaluation, all mark its steady progress toward the global market.
In summary, with a clear production plan (targeting 200 units annual output by 2029) and a massive domestic market, China’s large aircraft is moving from an “alternative” to an indispensable “incremental supply pole” on the global narrow-body aircraft market. This accelerated process directly challenges the Boeing-Airbus duopoly and creates huge market space for domestic industry.
3. What’s next? Key segments and leading company value logic
Currently, the C919 supply chain, especially in power and avionics systems, is still highly dependent on overseas suppliers (such as CFM’s LEAP-1C engine). Amid a complex international situation, achieving independent and controllable key systems has become the lifeline of national strategy and industry safety. Localization campaigns have begun in two core systems:
① Engine system (“Heart”): The domestically produced Changjiang-1000A (CJ-1000A) high-bypass turbofan engine, designed for the C919, has entered the airworthiness certification phase and performed “well beyond expectations” in testing. AVIC Commercial Aircraft Engine Company has completed mixed ownership reform and brought in strategic investors, valued at over 30 billion RMB, and is actively preparing for an IPO to inject capital into engine industrialization. Estimates indicate that the commercial aircraft engine market in China will exceed $600 billion over the next 20 years, averaging more than 20 billion RMB per year. Engine breakthroughs are key for releasing capacity and capturing maximum value.
② Avionics systems (“nerves and muscles”): High in value but with low localization rate. Of the C919’s 40 level-one system work packages, 39 are supplied by foreign vendors. AVIC Avionics is China’s main domestic avionics systems supplier; it has moved headquarters to Shanghai, focusing on commercial aviation development and securing hundreds of subsystem contracts for the C919. Its development plan is clear: complete industrial layout by 2025 and become a world-class supplier by 2035. Through comprehensive “iron bird,” “electric bird,” and “copper bird” tests, it is establishing a full research and validation system for avionics, now leaping from “existence” to “quality” and from “meeting airworthiness” to “global competitiveness.”
③ Aircraft materials localization is also urgent. In China’s existing fleet of nearly 4,400 civil aircraft, Airbus and Boeing account for over 95%, making material supply dependent on imports. As the domestic fleet expands, the market for aircraft materials distribution and manufacturing localization has huge potential.
Driven by “global demand gap + localization replacement + batch production ramp-up,” investment opportunities in the large aircraft industry chain will display sectoral and ongoing features. The future strategic industrial layout is as follows:
① Materials and structural parts: First beneficiaries, with high performance certainty:
Aircraft structures (such as nose, fuselage, wings) have the highest localization rates and will directly follow full-aircraft capacity expansion. Advanced materials like carbon fiber composites, titanium alloys, and high-temperature alloys are key to weight reduction and efficiency, with demand and value continuing to rise.
② Engine systems: Long-term, enjoy dual dividends from maintenance and localization
Aero engines account for half the lifecycle cost of aircraft with excellent commercial models (after-sales service income is around 75%). In the global context of aging fleets and explosion in maintenance demand, domestic engine chain companies not only benefit from global division of labor but will lead the Changjiang engine series from 0 to 1, and from 1 to N in the huge market.
③ Avionics and supporting systems: A localization blue ocean, from breakthroughs to growth
Avionics systems are high-value and have vast localization potential. With AVIC Avionics combining strengths, domestic firms will achieve breakthroughs from subsystems to system integration in flight controls, avionics, and electromechanical systems.
④ Aircraft materials distribution and maintenance support: Invisible champions in the aftermarket
As the domestic fleet expands, demand for material assurance, distribution, and MRO services will explode. Domestic material certification and replacement is a clear trend.
⑤ Final assembly and leaders: Industrial hubs
COMAC (not yet publicly listed, industry core).
2026 will be the inaugural year for China’s large aircraft industry to fully pivot from “development and flight testing” to “industrial explosion.” With the completion of the second phase C06 plant at Pudong Zhuqiao and the CJ1000A engine entering the eve of mass production, the C919 is evolving from a single model to a series (-600 type, -800 type), and the comprehensive launch of the C929 marks China’s formal entry into independent wide-body jet development. The global civil aviation manufacturing industry is experiencing a “severe supply disruption” and “aging fleets,” and the domestic large aircraft, with trillion-level order reserves and an increasingly mature local supply chain, is set for historical value re-evaluation.
The domestic large aircraft is not only an industrial product, but also the “anchor” of China’s high-end manufacturing. China’s massive domestic market and complete industrial system provide unmatched confidence. Investment opportunities have shifted from thematic speculation to deep excavation of industrial trend certainty and company performance growth. This is a long-term investment accompanying national rise and industrial upgrading, with an already clear vast space and ongoing industrial breakthrough.
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