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Rivals' woes put crimp in Bombardier's order book

Gary Scott, president of new commercial aircraft at Bombardier, in a C Series mock-up in Montreal .

IAN BARRETT/The Canadian Press

Bombardier played down speculation that it would announce a blockbuster order for its flagship C Series jet at the Paris Air Show, but insisted the program was alive and well and would eventually book thousands of orders.

The world's third-largest aerospace maker, after Airbus and Boeing, cancelled a news conference that had been scheduled for Monday, suggesting a batch of new orders may not come this week. The Montreal company is under pressure to ring up sales after failing to announced a single new order at the 2010 Farnborough Air Show, the industry's other showcase event (Paris and Farnborough are held in alternate years).

Three years after the C Series project was launched, the plane has only 103 firm orders and the same number of options. Thirteen of those orders were announced earlier this month, after an order drought that lasted more than a year, though more could be announced shortly as talks continue with dozens of potential buyers.

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In an interview, Gary Scott, 60, the former Boeing executive who is president of Bombardier's commercial aircraft division, blamed the relatively slow order flow partly on its competitors' reputation for new aircraft delays. "There is a big concern that our plane will be delayed too," he said.

Mr. Scott said the skepticism about the C Series' progress is unwarranted. There has been no change to the plane's scheduled first flight in the second half of 2012, with deliveries to airline customers, among them Lufthansa, starting in late 2013.

The new Boeing 747-8 Jumbo, which made its international debut Sunday at the Paris Air Show, the Boeing 787 Dreamliner, which has yet to go into commercial service, and the Airbus A380, the world's largest passenger plane, angered airline customers because of their lengthy delays.

On Saturday, Airbus announced yet another delay. Two of the three models in the A350 family, the new wide-body jet that is competing with Boeing's 777-300ER, will come out about two years later than expected. "We are paying for the delays of Airbus and Boeing," Mr. Scott said. "Our customers are demanding more guarantees on the schedule."

The C Series is an entirely new plane aimed at a market in which Bombardier has never competed - twin-engine jets with 100- to 150-seats. Its existing commercial fleet consists of smaller regional jets of various sizes. The C Series is competing with the largest Brazilian Embraer jets and the smallest models from Boeing and Airbus, notably the Airbus A319 and its successor, the A319neo, which will come with more fuel-efficient engines.

The C Series is Bombardier's most important project since its regional jets (with typically 40 to 100 seats) took flight in the early 1990s. With regional jets losing sales in recent years, Bombardier gambled on a larger aircraft - the C Series - that would fit into the gap between the biggest regional jets and the smallest full-sized jets. Using advanced materials such as composite fuselage sections, and an entirely new Pratt & Whitney "geared turbofan" engine, Bombardier is pitching the plane as a significant operating-cost saver - about 15 per cent - over any comparably sized aircraft already on the market.

The plane's success is crucial to Bombardier's aerospace fortunes and its emerging reputation as a viable competitor to Boeing and Airbus - the industry giants. The total development costs of the C Series (excluding $700-million U.S. in property, plant and equipment) is $2.7-billion. Of that amount, $1.3-billion is borne by Bombardier; the rest is split between government financing and suppliers. Already, 2,000 employees are working on the C Series, a figure that will rise to 3,500 when production starts.

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While some analysts think the C Series has huge potential, others think competing with Airbus and Boeing is folly. Richard Aboulafia, an aviation analyst at Teal Group, told Flight International magazine that "there's a risk the C Series remains a marginalized product" because of Airbus A319, whose launch was accelerated because of the potential threat of the C Series.

Airbus chief salesman John Leahy last year said the upgrades of small Airbuses "kill the business case" for the C Series.

Bombardier's Mr. Scott said the fairly meagre order flow so far is not surprising because the C Series is a new product with new technology. "Most customers take a wait-and-see attitude and want to see how it evolves," he said.

Soon, he said, customers will realize "that the airplane is starting to become real" and will place orders. Bombardier is sticking by its forecast that the C Series will capture half of the estimated 7,000 planes built for the 100- to 150-seat category in the next 20 years.

One big potential customer is Qatar Airways, whose CEO, Akbar Al Baker, was thought to be close to announcing a big order for C Series jets last year, at the Farnborough show. He backed off, though Bombardier is still in negotiations with him.

Mr. Scott said Qatar has "expressed a lot of interest in the plane" and he is "encouraged" by the talks so far, but would not attach odds on snagging a Qatar order during the Paris show.

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About the Author
European Columnist

Eric Reguly is the European columnist for The Globe and Mail and is based in Rome. Since 2007, when he moved to Europe, he has primarily covered economic and financial stories, ranging from the euro zone crisis and the bank bailouts to the rise and fall of Russia's oligarchs and the merger of Fiat and Chrysler. More

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