The first day of this year?s Paris Air Show sure was extraordinary and strange.
The event is also shrouded in mystery. Mystery from Bombardier Inc. the world leading transportation manufacturer cancelled a booked morning news conference room, but by mid day afternoon scrambled to announce an order for 10 CSeries to another mystery buyer.
The company refused to reveal the identity of the customer, but referred to as a ?major network carrier?. This is actually the second consecutive CSeries customer declined to be named. Two weeks ago, a customer that bought three of the planes under development in Montreal also requested anonymity.
No glamour campaign
Usually, manufactures and first recipients shower each other with compliments and praise very publically at splashy happenings. However its everyone?s guess that the mystery client is calling the shots and prefer to be in the shadow.
The fact that the airline will be the CSeries so-called launch customer, it will take the first deliveries for the CS100 110 -seat jetliner to enter service in late 2013. Which is not a far off date.
AG was told that it may be either an Indian or Mid-eastern company, no confirmations yet.
Industry watchers generally welcomed the announcement, saying it would give the CSeries another small but sorely needed fresh impetus.
End of the Drought
The plane currently on the drawing board suffered a 15-month order drought that ended three weeks ago with a firm order for 10 planes and 10 more options from Sweden’s Braathens Aviation. It was followed by the three-plane order, which also included three options.
Monday’s order at Le Bourget boosts the CSeries order book to 113 firm and 109 options. At list price, the latest order is worth $616 million U.S., and $1.01 billion U.S. if the six options are exercised, although those prices are far above real-world prices.
Benoit Poirier of Desjardins Securities Inc. called the order “a positive sign for the program given it indicates that major airlines believe the first deliveries should be mostly glitch-free.”
Aviation consultant Richard Aboulafia of Teal Group in Fairfax, Va., said tongue-in-cheek in an email that “some major network carriers are quite shy, apparently.”
Like other industry watchers, he said he had “no idea who (the airline) is.”
Aboulafia, a CSeries skeptic, said that “the (110-seat) model is mystery. Very few major network carriers are interested in a niche 100-seat fleet.”
Bombardier Commercial Aircraft president Gary Scott said “this is the third order to fall this month, so I think we could see more of that relatively soon – and throughout this year. We don’t target air shows but it’s nice that it happened.”
Any more orders at Paris? “I wouldn’t rule it out.”
Scott added that airlines “have their own reasons (for requesting anonymity), particularly the first ones to operate an aircraft. They want to sort of retain the advantage for as long as they can.”
The CSeries is designed to cut 15 per cent in cash operating costs, including 20-percent less fuel consumption.
Scott said that customers who take first deliveries (strictly speaking, Lufthansa was the CSeries launch customer when its soft order for 30 CSeries planes in 2008 allowed Bombardier to launch the program – also a soft launch that was later firmed up) may also “not be in a position yet to roll out how they plan to use the airplane, etc. So they’re still working on that and they’d like to defer (disclosing) their name until such time as they’re ready.”
Even the wings of the C series is buzzing with information.
The wings for the C series, which has been designed for the growing 100 to 150-seater market, have been developed in Belfast and production will begin later this year.
The second phase of the new wing-manufacturing and assembly facility at Airport Road is well under way.
The aircraft wing programme will employ over 800 in Belfast when in full production in a few years.
Scott and Guy Hachey, president of Bombardier Aerospace, say they want a stable of between 20 and 30 airlines to minimize exposure to one or a few over-dominant customers.
“We’re actually pursuing smaller orders,” said Scott. “I don’t want to mislead anyone: we still like big orders. But we’re trying to balance big and small ones. Everyone wants to see huge numbers of airplanes, but if we gave them all to one customer, it would not be healthy.”
Bombardier will be able to make only “a small number” of planes in 2014, at the beginning of the production curve.
“But we’re trying to double that number in 2015, and to go up another 50 per cent in 2016.”
“During that ramp-up period, airplanes will be a scarce commodity.”
That’s a problem holding up customers like legendary aviation buyer Steven Udvar-Hazy.
After announcing his Air Lease Corp. had purchased E190 jets from Bombardier rival Embraer of Brazil, Udvar-Hazy told The Gazette that he’s “interested in the CSeries, and we’ve talked to the Bombardier people about it.”
“But one of the aspects of the CSeries that’s problematic is that they’re not available in meaningful numbers. And they won’t be for four or five years. Generally, we have a two-or three-year horizon (to lease planes to airlines).”
Scott replied that “there really is no way around that for a new program” except to wait.
Ultimately, he said, Bombardier aims at producing a CSeries plane each (manufacturing) day, or about 240 a year.
Qatar Air looks elsewhere
A much-anticipated order from the Doha-based airline failed to launch at last July’s Farnborough show as well, apparently foundering over guarantees on the performance of the CSeries’ Pratt & Whitney new technology GTF (geared turbofan) engines.
National Bank Financial analyst Cameron Doerksen said in a report to clients that “this will be viewed negatively by the market as Qatar’s CEO had recently sounded more serious about making an order in Paris.”
“Although Qatar is apparently still interested in the CSeries, it is difficult to consider it a potentially serious customer given the repeated deferrals.”
Poirier said that he believes “the order announced this morning will overshadow the news from Qatar Airways.”
Doerksen said it’s “overall positive news for Bombardier as the CSeries order book builds. We expect further order news from Bombardier
Source: Herald Tribune, BBC, Wall Street Journal