Summary COMAC has consistently delivered over 20 ARJ21 aircraft annually since 2020, but faces a potential production overcapacity issue. Orders surged in 2019, resulting in high deliveries by 2020, rapidly depleting backlog orders, raising concerns. Without new orders, the ARJ21 program faces overcapacity; options include securing orders and customers, converting planes to freighters, or reducing the production rate if necessary.
With COMAC delivering its 142nd ARJ21 aircraft last week, the number of ARJ21 deliveries in 2024 has reached 20. This confirms that COMAC has delivered more than 20 ARJ21s annually for five consecutive years since 2020 and makes it almost certain that the total number of ARJ21s delivered this year will surpass last year’s 22. However, behind these positive numbers lies a looming production overcapacity issue within the ARJ21 program.
If corresponding measures are not implemented in the coming months, this problem could potentially surface as early as mid-next year. Year Number of ARJ21 Deliveries 2015 1 2016 1 2017 2 2018 6 2019 12 2020 23 2021 21 2022 34 2023 22 2024 20 (YTD) Total 142 (YTD) Early orders and production capacity of the ARJ21 program From the development phase to the initial delivery phase, the ARJ21 program faced a long-standing issue of insufficient orders, with only 30 confirmed orders from Chengdu Airlines for an extended period. In 2009, COMAC signed a letter of intent for 30 ARJ21 aircraft with United Eagle Airlines, the predecessor of Chengdu Airlines.
In 2010, due to poor management, the privately-owned United Eagle Airlines was fully nationalized, with COMAC and Sichuan Airlines becoming shareholders of the restructured Chengdu Airlines. The newly restructured Chengdu Airlines converted the 30 ARJ21 orders into firm orders, officially becoming the launch customer of the ARJ21. However, the second confirmed order for the ARJ21 was not seen for eight years.
The ARJ21 program obtained its type certificate in December 2014. On November 29, 2015, the first ARJ21 aircraft was delivered to Chengdu Airlines. However, due to the lack of a production certificate before July 2017, COMAC could not mass-produce ARJ21 aircraft, and ARJ21’s production capacity remained very low.
This, in turn, mitigated the pressure of insufficient orders on the ARJ21 program. After obtaining the production certificate in July 2017, COMAC accelerated ARJ21 production. In 2018, COMAC delivered six ARJ21 aircraft to Chengdu Airlines, marking a 300% increase compared to the two ARJ21s delivered the previous year and surpassing the total deliveries of the previous three years (2015-2017).
With the increase in delivery volume came the pressure for new orders. According to COMAC's production plan at the time, without additional orders, Chengdu Airlines’ 30 aircraft orders would be exhausted by mid-2020. This marked the first time COMAC faced a potential overcapacity issue.
Order growth for the ARJ21 program under adversity Following the 2018 Chinese New Year, COMAC began discussions with Genghis Khan Airlines , which was then under formation in Inner Mongolia. Six months later, on October 15, 2018, COMAC and Genghis Khan Airlines officially signed a purchase agreement for ARJ21 aircraft. According to public reports, Genghis Khan Airlines signed an order for 25 ARJ21 aircraft with COMAC.
On February 26, 2019, the first ARJ21 aircraft for Genghis Khan Airlines was delivered. The aircraft’s manufacturer serial number (MSN) was 116, indicating it was the 12th ARJ21 produced by COMAC and delivered to a customer. The previous 11 ARJ21 aircraft had all been delivered to Chengdu Airlines.
The world's only airline with an all-ARJ21 fleet to date. However, as Genghis Khan Airlines was a newly established regional airline, even with an order for 25 ARJ21s, its actual demand for aircraft was limited. This was proven by the fact that Genghis Khan Airlines received three ARJ21s in 2019 and two in 2020 and then went three years without receiving any new ARJ21 aircraft until October 2023, when it received its sixth ARJ21.
Nearly a year later, Genghis Khan Airlines’ ARJ21 fleet remains at six aircraft. The real breakthrough came in the summer of 2019. On August 30, 2019, China’s big three, three central government-owned airlines - Air China , China Eastern Airlines , and China Southern Airlines , each signed contracts with COMAC to purchase 35 ARJ21 aircraft, totaling 105 aircraft.
On June 28, 2020, COMAC delivered the first ARJ21 aircraft to each of China's big three on the same day. In 2020, COMAC also delivered the first ARJ21 aircraft to two other Chinese airlines, Jiangxi Air and China Express Airlines. In January 2021, COMAC signed an agreement with China Aircraft Leasing Company (CALC) to purchase 60 ARJ21 aircraft, including 30 firm orders.
According to the information released, CALC plans to deploy ARJ21 aircraft specifically in the ASEAN market, creating an overseas operational base. As a result, by the end of 2020 and the beginning of 2021, everything appeared to be in great shape, with a significant increase in both the number of customers and confirmed orders. At that time, the only topic worth discussing was whether ARJ21’s production capacity could keep pace with the growth in orders.
Find more news about Asian aviation here Rapid depletion of backlog orders The surge in orders in 2019 led to a boom in deliveries in 2020. Despite the pandemic outbreak, COMAC’s ARJ21 deliveries doubled again in 2020 . In 2022, COMAC delivered 34 ARJ21 aircraft, setting a new annual record for ARJ21 deliveries .
At the end of 2022, COMAC said it had reached a balanced production rate of 30 ARJ21 aircraft per year and established the capacity to produce 50 units annually at the assembly plant. But with growth comes a decline. Since January 2021, the ARJ21 program has received only one firm order over more than three years—10 high-altitude ARJ21 aircraft ordered by Tibet Airlines last year.
Meanwhile, from January 2021 to the present, 97 ARJ21 aircraft have been delivered. The backlog of ARJ21 orders is being rapidly consumed. According to the three major airlines' delivery plans, they will complete the delivery of their 35 ARJ21 aircraft by next year.
Currently, Air China has six remaining, China Southern seven, and OTT Airlines (a subsidiary of China Eastern) eleven. Chengdu Airlines’ 30 ARJ21 aircraft orders currently have only two left to be delivered. Genghis Khan Airlines and China Express Airlines, which have yet to take delivery of their ARJ21 aircraft, show little prospect of large-scale deliveries in the short term.
After delivering three ARJ21 aircraft to TransNusa Airlines, CALC has not secured any new customers in Southeast Asia. In these contexts, if the three major airlines and Chengdu Airlines complete their orders next year without new orders, the ARJ21 program will face a production overcapacity issue, with the earliest aircraft rolling off the production line as early as next year’s second half potentially left on the apron awaiting customers. Given the current production capacity of approximately 30-50 ARJ21 aircraft per year, if no new orders or customers are secured within a year, it is estimated that by the end of 2025, around 20-30 ARJ21 aircraft will face the embarrassing situation of being rolled out with no customers for delivery.
For COMAC, potential solutions to this issue may include securing new orders, acquiring new customers, converting early-delivered ARJ21s into freighter variants for cargo airline customers, or, if necessary, reducing production capacity. Regardless of the path taken, after five prosperous years, the ARJ21 program is once again facing the challenge of potential production overcapacity..
