Bombardier Inc.'s C Series aircraft, dogged by delays and rising costs, has emerged as the front-runner to win an order from Deutsche Lufthansa AG's Austrian unit, two people familiar with the matter said.
Austrian Airlines is leaning toward asking its parent for approval to buy 16 C Series planes, said one of the people, who asked not to be named because details aren't public. Lufthansa is already taking 30 of the jets for its Swiss arm and has options on 30 more.
Securing a follow-on order from Europe's second-biggest airline group would give Bombardier a lift as it struggles to crack the Boeing Co.-Airbus Group NV duopoly in narrow-body jets. In the Austrian contest, the C Series may have an edge as it's closer in size to the 21 Fokker planes it would replace.
"Swiss will get the C Series, but we have not yet decided if we will also fly the plane at Austrian," said Thomas Jachnow, a spokesman on fleet matters at Germany's Lufthansa.
Bombardier spokeswoman Genevieve Roy-Theriault said from Shanghai that "at the moment there is nothing new" regarding a follow-on order from the Cologne-based company.
The C Series will come in two sizes, with the CS100 due to seat 108 to 125 passengers and the CS300 carrying 135 to 160. At Austrian, the jets to be retired comprise 15 Fokker 100s, with a capacity of 100 people, and six Fokker 70s, seating 80.
Also in the running are the Airbus A319, a shrink of the baseline A320 single-aisle model with 124 seats in a two-class layout, and the E190 from Embraer SA of Brazil, Montreal-based Bombardier's biggest rival in the regional jet market.
Austrian Air said on May 30 that it would suspend plans to choose a Fokker successor this year until reaching a new wage deal with employee representatives. The airline said last week that an accord had been agreed and will take effect Dec. 1.
Bombardier opted to develop the C Series, its biggest-ever aircraft, after helping to pioneer the regional-jet industry in the 1990s. The company once looked at buying Fokker NV to aid the leap into larger planes, before abandoning the plan in February 1996, with the Dutch manufacturer ceasing production.
The C Series is now set to enter service in the second half of next year after missing a planned 2013 debut, and the program - which aims to generate as much as $8 billion in revenue once in full production - is $1 billion over budget.
Bombardier secured a deal for 40 of the jets from the leasing arm of Australia's Macquarie Group Ltd. last month. While that boosted the order tally to 243, that's still short of the 300 targeted by the time of service entry, and Lufthansa remains the largest carrier to commit.
Sweden's Braathens Aviation AB backed away from plans to be the first C Series operator in August, saying it was in talks about changes in the delivery schedule for a 10-plane order.
The biggest U.S. order deal is also in doubt after Republic Airways Holdings Inc. said in May it was considering what to do about a purchase of 40 planes following the sale of the unit that would have used them. On May 29, a C Series jet also suffered an engine failure during a ground trial, forcing Bombardier to park the test fleet for three months.