Bombardier approves new "CSeries" jet
03-16-2005, 09:55 PM
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Bombardier approves new "CSeries" jet
Bombardier Inc. board approves development of new CSeries passenger jets
01:49 AM EST Mar 17
ALLAN SWIFT
MONTREAL (CP) - Bombardier Inc.'s plan to risk its future on a new and larger passenger jet - with heavy support from government - took a big step forward Tuesday when the board of the transportation giant granted approval to market the aircraft.
This means Bombardier's aerospace division now has to go out and sign up at least one major customer for the CSeries, a new family of jet seating 110-to 130 passengers, before the company officially launches the program.
Bombardier Aerospace president Pierre Beaudoin told a conference call he has had expressions of interests from dozens of airlines around the world for the new aircraft.
"Airlines have been very excited about our new offering," Beaudoin said.
"We have to turn expressions of interest into firm orders. Between this there's a lot of work."
The proposed new aircraft would vault Bombardier into a new multibillion-dollar market and pit the company against the world's two major commercial airline makers - Boeing of the United States and Airbus of Europe - in the market to sell mid-sized jets to international airlines.
Until now, Bombardier has focused on making corporate jets and smaller planes for regional airlines around the world, competing primarily with Brazilian plane maker, Embraer.
Beaudoin said Bombardier's board was unanimous in its decision Tuesday, and will be asked for approval to launch the program "in a few months," as well as select a final assembly site, expected to be Montreal.
Industry players estimate the market for aircraft seating 100 to 150 passengers, over the next 20 years, will be 5,800 planes, worth $250 billion US, Beaudoin said.
"With our (aircraft) family we can capture a significant share of this market," Beaudoin said.
Bombardier claims the CSeries will be 15 per cent more efficient than existing planes in the market, which are scaled-down versions of Boeing 737 and the Airbus A319.
Aerospace consultant Michael Boyd from Golden, Colo., said there is still a risk in competing against those huge manufacturers, because airlines can save on training and maintenance by buying smaller aircraft of the same family.
Until now, Bombardier's aircraft seating 50 to 90 passengers have not bumped into the two major manufacturers.
Just the same, Boyd said Bombardier and the entire Canadian industry cannot afford not to take that chance, because sales are starting to decline for the Montreal company's smaller regional jets.
"Bombardier would have been very ill-advised not to make this decision," said Boyd.
"They need to do this, and the folks up in Ottawa need to fund it too, because if you don't, Canada will not be in the airliner business."
Boyd has just completed a market study that suggests the biggest market demand over the next 20 years for passenger jets is in the 80-to 150-seat category, and of that segment, the strongest is for 100 to 125 seats.
"So from the perspective of the CSeries fitting into a demand bend, they're right in the sweet spot."
Beaudoin said talks are still going on with the federal and British governments over financial aid, which would come in the form of loans to be repaid out of royalties on future sales. Bombardier is expected to manufacture most components and assemble the planes at its own plants, in Montreal, Toronto, and Belfast, Northern Ireland.
Total development costs are estimated at $2.1 billion US, excluding engine, equally divided between the company, suppliers and government.
Gary Scott, heading up the new aircraft's development, said 400 Bombardier employees are working on the program as well as about 150 people from supplier companies.
Last week, Bombardier and the union representing Montreal-area aerospace workers agreed to a new cost-cutting labour contract to help entice the company to do a maximum amount of work in Montreal.
In trading on the Toronto Stock Exchange on Tuesday, Bombardier stock gained seven cents to close at $2.82, a gain of 2.55 per cent, in trading of nearly 5.7 million shares.
01:49 AM EST Mar 17
ALLAN SWIFT
MONTREAL (CP) - Bombardier Inc.'s plan to risk its future on a new and larger passenger jet - with heavy support from government - took a big step forward Tuesday when the board of the transportation giant granted approval to market the aircraft.
This means Bombardier's aerospace division now has to go out and sign up at least one major customer for the CSeries, a new family of jet seating 110-to 130 passengers, before the company officially launches the program.
Bombardier Aerospace president Pierre Beaudoin told a conference call he has had expressions of interests from dozens of airlines around the world for the new aircraft.
"Airlines have been very excited about our new offering," Beaudoin said.
"We have to turn expressions of interest into firm orders. Between this there's a lot of work."
The proposed new aircraft would vault Bombardier into a new multibillion-dollar market and pit the company against the world's two major commercial airline makers - Boeing of the United States and Airbus of Europe - in the market to sell mid-sized jets to international airlines.
Until now, Bombardier has focused on making corporate jets and smaller planes for regional airlines around the world, competing primarily with Brazilian plane maker, Embraer.
Beaudoin said Bombardier's board was unanimous in its decision Tuesday, and will be asked for approval to launch the program "in a few months," as well as select a final assembly site, expected to be Montreal.
Industry players estimate the market for aircraft seating 100 to 150 passengers, over the next 20 years, will be 5,800 planes, worth $250 billion US, Beaudoin said.
"With our (aircraft) family we can capture a significant share of this market," Beaudoin said.
Bombardier claims the CSeries will be 15 per cent more efficient than existing planes in the market, which are scaled-down versions of Boeing 737 and the Airbus A319.
Aerospace consultant Michael Boyd from Golden, Colo., said there is still a risk in competing against those huge manufacturers, because airlines can save on training and maintenance by buying smaller aircraft of the same family.
Until now, Bombardier's aircraft seating 50 to 90 passengers have not bumped into the two major manufacturers.
Just the same, Boyd said Bombardier and the entire Canadian industry cannot afford not to take that chance, because sales are starting to decline for the Montreal company's smaller regional jets.
"Bombardier would have been very ill-advised not to make this decision," said Boyd.
"They need to do this, and the folks up in Ottawa need to fund it too, because if you don't, Canada will not be in the airliner business."
Boyd has just completed a market study that suggests the biggest market demand over the next 20 years for passenger jets is in the 80-to 150-seat category, and of that segment, the strongest is for 100 to 125 seats.
"So from the perspective of the CSeries fitting into a demand bend, they're right in the sweet spot."
Beaudoin said talks are still going on with the federal and British governments over financial aid, which would come in the form of loans to be repaid out of royalties on future sales. Bombardier is expected to manufacture most components and assemble the planes at its own plants, in Montreal, Toronto, and Belfast, Northern Ireland.
Total development costs are estimated at $2.1 billion US, excluding engine, equally divided between the company, suppliers and government.
Gary Scott, heading up the new aircraft's development, said 400 Bombardier employees are working on the program as well as about 150 people from supplier companies.
Last week, Bombardier and the union representing Montreal-area aerospace workers agreed to a new cost-cutting labour contract to help entice the company to do a maximum amount of work in Montreal.
In trading on the Toronto Stock Exchange on Tuesday, Bombardier stock gained seven cents to close at $2.82, a gain of 2.55 per cent, in trading of nearly 5.7 million shares.
03-16-2005, 11:10 PM
#2
Da Man
Joined APC: Feb 2005
Position: DC-10 F/O
Posts: 436
Originally Posted by RockBottom
a new family of jet seating 110-to 130 passengers
My guess is that EMB isn't spending any marketing capital trying to court any of the legacy carriers.
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