Senior Bombardier officials are expected to travel to Chicago for meetings Thursday to present the company’s flagship C Series plane to United managementPascal Rossignol/Reuters
Bombardier Inc. is locked in a near-term battle with Embraer SA for a contract to supply United Airlines Inc. with new jets, a key sales campaign that could fuel momentum for the struggling Canadian plane maker if it can clinch a deal.
Senior Bombardier officials are expected to travel to Chicago for meetings Thursday to present the company's flagship C Series plane to United management and employees. Brazil-based Embraer, which has an installed base of E175 jets flying for United's feeder system, is also vying for the contract. Boeing and Airbus could be in the picture too, although their smallest planes aren't thought to be what United is looking for with this purchase.
"It would be a significant win with a Tier-1 global customer for Bombardier and an incredible vote of confidence in the [C Series] program," said analyst Chris Murray of AltaCorp Capital in Toronto. It's unclear exactly how many aircraft United is eyeing with the purchase, but two credible sources peg it at 30 planes with options on 30 more.
Bombardier shares rose 3 per cent to $1.28 in Toronto trading on Wednesday, breaking an eight-day slide.
Armed with a $1-billion (U.S.) financing commitment from Quebec, Bombardier confirmed it is taking the C Series on a demonstration tour to prospective customers starting this week. Chief executive officer Alain Bellemare has said he believed the government support would give the plane maker renewed traction in the market.
Bombardier has tallied 243 firm orders for the C Series, a two-model family of jets that seats between 100 and 160 people, but hasn't booked an order since September, 2014. The company has just completed certification flight testing for the smaller CS100, and it is showing one of the planes painted in colours of its launch customer, Swiss International Air Lines, to prospective customers.
"We're now switching over and making a more concentrated effort on sales and marketing outreach," said Bombardier spokeswoman Marianella de la Barrera. "It was a little tougher to do when the aircraft were [all] in the flight test program." She declined to identify any specific customers.
Critics of the single-aisle plane, which Bombardier is counting on to fuel revenue over the next 20 years, note that the company has failed so far to sign a blue-chip North American airline as a client. Winning United would quash that criticism with an endorsement from one of the biggest carriers in the world.
"We call it the Good Housekeeping Seal of Approval," said Leeham & Co. consultant Scott Hamilton.
United told its pilots that it plans to order a fleet of 100-seat airliners from either Bombardier or Embraer on the condition it can agree with them on terms for a two-year contract extension in expedited bargaining, according to Bloomberg. A deal would allow United to bring back some flying now done by regional feeders with less-efficient 50-seat planes, the news agency said.
Bombardier's CS100 is competing against Embraer's E195 for the contract, analysts said. Officials with United and Embraer did not respond to requests for comment.
One reason why Bombardier has been unable to book big new orders for the C Series is that major customers need to receive the aircraft much sooner than the plane maker's financial resources have allowed, said analyst Nicholas Heymann of U.S. brokerage William Blair. Quebec's investment, combined with the sale of a minority stake in Bombardier's train business, will probably allow the company to expand manufacturing capacity by adding a second C Series production line to help it meet delivery deadlines of many new and potentially far larger customers, he said.
Nicolas Van Praet