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Delivery date for Chinese first homegrown jet airliner delayed, again, until mid-2014

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BEIJING, China - The delivery date of China's long-delayed first commercial jet airliner has been pushed back again, the manufacturer said Wednesday, the latest setback for China's ambitions to challenge market leaders Boeing and Airbus.

Originally promised for 2007, the plane was most recently expected late this year, but Comac Chairman Jin Zhuanglong said it will now be ready in mid-2014.

"The development will not always go smoothly, and the program cannot be accomplished at one stroke," Jin was quoted as saying in comments released by the company.

Jin blamed delays in the ARJ21 program on China's inexperience in designing, building and certifying commercial jetliners. But he said the program is still on track for delivery next year to launch customer Chengdu Airlines, a small Chinese regional carrier that has ordered 30 of the planes.

Delays in the 90-seat ARJ21 could have knock-on effects for the development of the bigger and more ambitious C919, intended to compete with Boeing's 737 and the Airbus A320. The U.S. Federal Aviation Agency will not issue crucial U.S. certification for the larger plane until the ARJ21 is certified.

Beijing has built up state-owned "national champions" not only in aviation but in industries from oil and telecoms to steel and banking with monopolies, low-cost bank loans and other favours. The government defends the privileges as necessary for creating companies that can compete globally but they are no guarantee of success, with Chinese state firms still lagging far behind Western competitors.

China launched the ARJ21 project in 2002 as rising household incomes sparked a massive expansion of the domestic airline industry that continues to this day. State-owned Comac was formed to build the aircraft in Shanghai and a host of foreign contractors signed on to provide avionics and other crucial systems.

Jin said four prototypes have made 2,000 flights. Two customer aircraft are in final assembly and another is under construction, he said.

Despite its problems, Comac already has about 240 firm orders and options for the ARJ21, mostly from domestic carriers, but also from GE Capital Aviation Services and Lao Airlines. It has even more, about 380, for the 174-seat C919.

Beijing prioritizes homegrown industries, which likely has given a boost to the sales. Beijing must approve all major airplane purchases and has considerable power over financing and other inducements that could sway domestic airlines into ordering the jets.

Equipment maker Honeywell has contracts with both planes, and its Asia-Pacific president for aerospace, Briand Greer, said delays are to be expected given the complexity of bringing together global suppliers and given China's newness to the Western certification process.

"It's a very, very complex thing to do. From my perspective, working with Comac isn't any more difficult than working with the other guys," Greer said in a recent interview.

In some ways, working with Comac is better than with established companies such as Airbus and Boeing because the Chinese company has greater appreciation for suggested improvements, Greer said. "They're much more open to what the suppliers are saying."

Greer said he has no doubt of the Chinese aircraft's eventual viability, given the government's massive backing.

"They made it a national agenda. They're putting hundreds of millions of dollars into it. It will be successful," he said.

Most of the customers for the ARJ21 will be Chinese carriers and a few small airlines in developing countries tempted by generous prices and financing terms, said Greg Waldron, Asia Managing Editor at Flightglobal magazine in Singapore.

However, both it and the C919 are "as much about gaining experience and know-how as they are about building competitive airliners," Waldron said.

"China is very serious about being a global aerospace player, and its current programs should be viewed as long term investments that will only start bearing fruit decades from now," Waldron said.

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