Bombardier Inc. kicked off a crucial month for its new C Series airplane by firming up a multibillion-dollar order and revealing the identity of a key Middle Eastern customer.
The momentum for the C Series comes just ahead of the widely watched Paris Air Show and just weeks before the jet is scheduled to make its first flight, which Bombardier and industry analysts believe will be a catalyst for further orders.
The plane’s first flight, expected by the end of June, is the most critical milestone yet in the $3.4-billion program, which is designed to propel Bombardier into the biggest and most lucrative segment of the airplane market – narrow-bodied commercial jetliners – where it will directly challenge larger and dominant rivals Airbus SAS and Boeing Co.
“When this thing is in the air it goes from being a paper airplane to a real airplane” said Walter Spracklin, who follows the company for RBC Dominion Securities Inc. in Toronto.
The first flight had been scheduled to take place before the end of 2012, but was extended by six months amid supplier delays.
Now it appears everything is on track to meet the new deadline.
Ground testing has been completed, which means it is up to the flight test crew to decide when the plane will take to the skies for the first time, above suburban Montreal.
Bombardier said Tuesday that Ilyushin Finance Co. of Russia has firmed up a conditional order for 32 of the larger CS300 version of the plane and signed options for 10 of the smaller CS100 model.
At list prices, the CS300 order is worth $2.56-billion (U.S.). If the options are converted, the value of the contract will rise to $3.42-billion.
The upgrade of the Ilyushin order raises the number of firm orders for the C Series to 177. The company’s target is to have 300 orders by the time the first plane is delivered to customers, which is scheduled for the middle of 2014.
Bombardier also identified Bahrain’s Gulf Air as the buyer under a previously announced contract for 10 C Series jets. The deal gives Bombardier further inroads into the company’s fast-growing Middle East and Africa segment, where it said it has tripled its aircraft representation over the past four years.
Orders for the C Series have been sporadic, in part because Airbus and Boeing both experienced massive delays in developing new wide-bodied airplanes, the A380 and 787 respectively. Those delays caused airlines to take a wait-and-see attitude to the offering from the Montreal-based transportation giant.
“There is no faith, trust or belief in anything an airframe maker says today because of the program performance,” Bloomberg news service quoted Chet Fuller, senior vice-president, commercial of Bombardier Commercial Aircraft, as saying this week at a conference in South Africa.
Mr. Spracklin expects new orders to be announced at the Paris Air Show, which opens for industry officials on June 17. He also expects the first flight to help convince some airlines that have been sitting on the sidelines to place orders.
“From a capital markets perspective, I can’t think of a more critical month than this month for Bombardier,” he said.
The aerospace giant has been marketing the plane by saying it offers a 20-per-cent improvement on fuel economy and 15-per-cent lower cash operating costs than existing planes in the 100-seat to 149-seat segment of the narrow-bodied market.
A successful first flight will allow Bombardier to begin proving those claims and send test data back to customers so they can see how it performs in the air, Mr. Spracklin said.