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A new Qatar Airways Airbus A340-600 sits on the tarmac at Doha airport after arriving from Airbus headquarters in Tolouse, 11 September 2006. (AFP/Getty Images)
A new Qatar Airways Airbus A340-600 sits on the tarmac at Doha airport after arriving from Airbus headquarters in Tolouse, 11 September 2006. (AFP/Getty Images)

Sale of Bombardier C Series to Qatar Airways in jeopardy Add to ...

A key order for the new Bombardier C Series plane that seemed a sure thing earlier this year appears to be in serious jeopardy, as the airline industry pressures the two giants that dominate airplane manufacturing to address challenges from Bombardier and other new entrants.

Qatar Airways Ltd. has been talking about an order for the C Series planes since last spring, but Akbar Al Baker, chief executive officer of what would be the first Middle Eastern customer for the plane, said on Thursday that the airline might buy planes from Airbus SAS instead.

While Bombardier develops the C Series with a schedule to begin commercial flights in 2013, Airbus and Boeing have been jockeying for position to respond in the narrow-bodied segment of the jet market. The C Series, Bombardier's most ambitious plane project to date, represents the first serious challenge to the Europe and U.S.-based giants and will be followed by competition from China, Russia and probably Brazil.

But the Canadian transportation giant and its engine supplier, Pratt & Whitney Co. Inc., need to get their act together, Mr. Al Baker told reporters in France on Thursday.

"We have issues with the C series and these issues still have not been resolved," he was quoted as saying. "If they do not roll up their sales very fast, [Airbus]will eclipse them."

Instead of buying C Series planes, Qatar Airways could turn to Airbus. Mr. Al Baker expects the European plane manufacturer to announce later this year that it will develop new, more fuel-efficient engines for its A320 family of aircraft. That is the NEO, or new engine option.

"We may be one of the launch customers for the NEO," he said.

He described the issues with Bombardier as being "commercially sensitive." During the Farnborough International Air Show in Britain in the summer, he said his concerns centred on the engines.

Katy Padgett, a spokeswoman for Pratt & Whitney, a unit of United Technologies of Hartford, Conn., said engine testing is meeting all of the engine maker's performance requirements and the testing program is on schedule.

"The Bombardier C Series program is progressing well and is on time," Bombardier spokesman John Arnone added in an e-mail Thursday.

Qatar Airways recently won approval to introduce flights between Toronto and Doha. The approval came just weeks after Mr. Al Baker told an airline conference that Canadian companies are trying to sell equipment to the airline, but he wanted access to the Canadian market in return.

Airlines are closely watching how Airbus and Boeing are reacting to new competition from Bombardier and others in the single-aisle segment of the aircraft market. The two companies have delayed their responses, but it appears as though Airbus will go ahead with new engines, while Boeing's response will be to develop a new airplane. A new Boeing model, however, is not likely to arrive until the 2020s.

Boeing is probably content to allow Bombardier to pick off some of its customers at the low end of the market, and the fuel economy performance of the Boeing 737 is better than that of the A320, said Richard Aboulafia, vice-president of analysis at aviation consulting firm Teal Group Inc. in Fairfax, Va.

"Airbus, though, they're in a trickier spot because Bombardier is aiming at all their customers and it's tough to be the third guy in terms of fuel burn," Mr. Aboulafia said.

The two giants are also under immense pressure in the wide-bodied market. A Rolls-Royce engine on a Qantas Airbus A380 blew up in flight on Nov. 4. The wide-bodied Boeing 787 Dreamliner, meanwhile, is three years behind schedule.

Mr. Al Baker criticized Boeing as well, describing the 787 as a program that has "very clearly failed."



With files from Reuters and Bloomberg News













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