One month before of the 10th anniversary of the programme’s launch event at the Farnborough air show, Bombardier and Airbus executives met in Montreal to finalise an agreement to transfer the majority ownership of the CSeries aircraft family to the European manufacturer.
The deal will not become effective until 1 July, but both parties described the early morning signing event as a historic moment in the bittersweet saga of the CSeries programme and the market for small narrowbody aircraft in general.
“I’m confident that in the near future we’ll look back on this day as a defining moment for the CSeries as well as a game-changing event in the 100-150 seat aircraft segment,” says John DiBert, Bombardier’s chief financial officer.
The finalisation of the deal comes more than eight months after Airbus and Bombardier startled the industry by coming to terms on a partnership in the first place. For Bombardier, the agreement appeared to be a life-line for the first clean-sheet aircraft design developed for 100-150-seat market segment in decades.
Despite brimming with new technology, including fly-by-wire flight controls, composite wing panels, an aluminium-lithium structure and Pratt & Whitney geared turbofan engines, the production ramp-up had slowed to a crawl and orders had been curtailed by the threat of a looming trade complaint within the US government that was instigated by Boeing.
The CSeries ultimately prevailed over Boeing’s trade lawyers at the US International Trade Commission, just as a raft of new orders from EgyptAir was signed.
As Airbus takes control at the dawn of the CSeries’ programme’s second decade, the focus of the joint company is to realise the so far elusive potential of the CSeries in a long-neglected market segment.
“Quebec and Canadian tradition of aerospace innovation can now realise its full potential,” DiBert says.
Airbus chief financial officer Harold Wilhelm agreed: “Combining Airbus’s global reach and scale with Bombardier’s state of the art aircraft will unlock the potential of the CSeries platform.”
The quantification of the CSeries’ true potential, however, has been a point of some debate over the last decade.
At the time of the programme’s launch in 2008, Bombardier estimated a market demand for 6,300 aircraft between 100-150 seats over the next 20 years, averaging 315 deliveries from 2008 to 2027. Halfway through that period, the market has so far not lived up to that estimated potential. Six models have delivered into that segment since 2008: the Boeing 737-700, Airbus A318 and A319, Bombardier CS100 and CS300 and Embraer E195. The six models have a combined 805 deliveries over the last 10.5 years, averaging fewer than 80 aircraft a year, according to Flight Fleets Analyzer.
If anything, demand has weakened in that market segment over the last half decade. Sixty-eight percent of the 805 deliveries since 2008 were recorded before 2013, the Analyzer shows.
Still, Airbus and Bombardier believe the new partnership can help stimulate demand for new small narrowbodies. Bombardier’s most recent market forecast released last September estimates demand for 6,800 aircraft in the 100-150-seat category over the next 20 years.
Airbus executives believe the key to achieve those numbers is to combine the scale of its own industrial and marketing strength with the performance attributes embedded in the CSeries design. Revenues at Bombardier Commercial Aircraft in 2017 totaled $2.4 billion, including regional jets and turboprops. Airbus commercial aircraft generated revenues of $59.9 billion.
Starting 1 July, the focus of the Airbus-led management team will be to solve the problems that have slowed the CSeries production ramp-up and constrained sales, which may in some cases be over-lapping. As Bombardier approaches the mid-year point, the company has achieved only 25% of its 2018 goal for 40 CSeries deliveries.
“We want to bring the aircraft to market. That’s going to be our key challenge,” says Philippe Balducci, the Airbus-appointed chief executive of the CSeries partnership.
“The second focus will be to sell the aircraft to the marketplace, leveraging Airbus’s firepower today. Those two happening will help reduce the cost and improve the recurring cost.”
Source: Cirium Dashboard
