C100 At Paris Airshow

[boestar]

The problem is that back in the early jet age, technology progressed more slowly. Generally a new jet aircraft was very similar to another technology wise there the learning curve was shallow. In the last 30 or so years the technology development began to accelerate. today in order to compete you need to have the latest technology, best efficiency and best passenger comfort. All at a good price point.

That "latest Technology" and "high efficiency" come at a cost in time, testing and development. Many companies far under estimate what it takes to incorporate that new technology. For any consumer application the technology would be fine and eventually mass produced to become cheap common technology but in Aviation the same cannot be said. Any new technology needs to be debugged, tested, debugged again. Redundancies need to be built in and most important the regulator needs to approve it for use in a commercial aircraft. That takes time and money and lots of both. High efficiency rides on the coat tails of new technology as you cannot have one without the other.

Boeing found all this out with the 787. Going all new technology in order to be more efficient caused numerous delays and issues with new technology systems. Budget over runs, late deliveries and in service issues, even a grounded fleet for a time. That is a huge cost.

Bombardier is in the same boat. In order to compete with the big boys they need something "better" so all new technology gets incorporated. On paper it all looks good but real life rarely reflects whats on paper. They are breaking new ground (for bombardier) with the C-Series and feeling the pain.

The plane seems to be meeting all of the predicted marks so its definitely worth saving. And it would mean a lot of lost jobs were it to be killed.

[Kip Powick]

CBC announces BD lost (approx)4.9B

QC government 'loans" (approx) 1.B as long as BD stays in QC for the next 20 years...money for C series

QC government almost owns 50% of BD now and analysts feel the QC government may soon have complete control of BD

http://www.cbc.ca/news/business/bombardier-quebec-cseries-investment-1.3293716

Toronto sues BD

The TTC paid more than $1 billion for 204 state-of-the-art streetcars from Bombardier in 2009. Some 60 of them were supposed to be in service by now, but only 10 are currently on the rails.

The company had vowed to deliver 23 new cars by the end of the year, but it backed away from that promise earlier this month, which prompted threats of legal action from the TTC.

The TTC board said at the time it was considering filing a $50 million claim.

http://www.cbc.ca/news/canada/toronto/ttc-bombardier-lawsuit-1.3293180

[Guest]

According to the news Bombardier will also be looking for major $$$$ from the Canadian Government. It appears to me that it is time to let them sink or swim on their own coupled with a retraining program for any displaced workers.

[DEFCON]

There's no doubt that Canada and Quebec share a need to maintain the technology and jobs in house, which means the Feds will absolutely have to become involved. This time around I think we can expect to see the BOD recast and the end of the Beaudoin family influence going forward.

[Seeker]

Big order coming for Embraer or Bombardier (assuming it ratifies). Apparently United execs are in Montreal this weekend - flew in from ORD on the CS100 on Friday.

http://www.bloomberg.com/news/articles/2015-11-21/united-airlines-reaches-proposed-two-year-labor-deal-with-pilots

[rudder]

This is from ualpilotsforum.org

Duration 2 years amendable on 1/31/19

• 1/1/16 16% raise

• 1/1/17 3% raise

• 1/1/18 2% (this may be off a percentage one way or the other)

• DAL ME TOO PAY RATE CLAUSE – Whatever DAL gets in terms of pay rates during the 24 months of extension (strictly pay rates, i.e., not for bonuses), the UAL pay rates go to that number.

• LOA 25 pilots made whole. 39 million dollar bucket distribution determined by ALPA.

• MOU 22 Language changes. Concept of company buying insurance policy, i.e., if they make an offer and pilot accepts he gets the add pay no matter what happens, changes to the pilot only gets the add pay IF in the actual operation the pilot goes over FAR 117 time. Also, if one pilot refuses to waive and the others do, they can fly the airplane home (this applies only to N. Atlantic operation).

• FRMS - agreement but no details revealed. Suspect that most international flights that are now critical in terms of CCO times (i.e., DEL, BOM, EWR-HKG, etc.) will be extended such that MOU 22 would be irrelevant.

• Apparently no concessions on SCOPE

• Apparently No Reserve improvements

[DEFCON]

"if one pilot refuses to waive and the others do, they can fly the airplane home (this applies only to N. Atlantic operation)"

How well will this idea work in practice?

[Lakelad]

.
Bombardier’s biggest gamble: How everything went so wrong with the CSeries dream

Mon Dec 14, 2015 - Financial Post
Kristine Owram

Even Bombardier Inc.’s competitors stopped what they were doing to watch the CSeries fly.

The long-anticipated, highly troubled Bombardier jetliner was finally making its debut at June’s Paris Air Show. There were line-ups for a look at the aircraft’s interior. CSeries press conferences were overflowing. But the moment of truth was the flight demonstration, where everyone craned their necks to see if the so-called “whisper jet” would live up to its name.

The reviews were enthusiastic. “It really was extremely rewarding after all the hard work,” recalls Rob Dewar, vice-president of the CSeries program.

But not rewarding enough. As the show wore on, Bombardier was forced to sit on the sidelines and watch as its competitors racked up hundreds of billions of dollars in new orders for their planes, while all the Montreal-based company had to show for the CSeries was an existing customer, Swiss International Air Lines AG, deciding to upgrade part of an existing CS100 order to the larger CS300.

Bombardier had built a damn good plane. And nobody was buying it.

The CSeries had from the beginning been a gamble. If executed properly, it would pay off in spades. That hasn’t happened and the outcome remains, seven-and-a-half years later, just as uncertain. The CS100 is expected to receive Transport Canada certification within the next few days. In a few months comes its first commercial flight. The CS300 is about six months behind that. But the CSeries has ravaged Bombardier, tearing apart its leadership team, sapping its financial resources and seriously damaging its reputation with investors and customers.

Bombardier shares have lost more than 80 per cent in value since the day the CSeries program was launched in July 2008. The company racked up more than US$9 billion of debt and recently received a total of US$2.5 billion from the Quebec government and the province’s pension fund to stay afloat.

The CSeries comes to market two-and-a-half years behind schedule and more than US$2 billion over budget. There hasn’t been a single new firm order in 15 months. In October, Bombardier took a US$3.2-billion impairment charge on the program. The executives who oversaw the creation of the CSeries are gone as the new CEO, Alain Bellemare, tries to rebuild after so many fiascos.

Bombardier had dreamed big with the CSeries. But, interviews with former and current insiders reveal, it was wholly unprepared for what it was getting itself into — unprepared for the assault that its fiercest competitors would unleash once they sensed the CSeries moving in on their turf; unable to properly manage its supply chain; and worst of all, unable to stay focused on the program, as internal battles broke out between executives over resources.

Bombardier was well aware of the challenges of developing a new aircraft from scratch, says Gary Scott, who led Bombardier’s commercial aircraft division before retiring in 2011. The company took note of Boeing’s well-publicized problems with its 787 Dreamliner — which arrived three years late and billions of dollars over budget — and gave itself what it assumed was a comfortable cushion of time and money.

“Nobody at Bombardier was naïve about the challenge,” Scott says. “They tried to mitigate every risk that they saw, but even with all that, it was still a bigger challenge than they could deal with.”

“There’s just really no substitute to having ‘been there, done that.’”

.

[Don Hudson]

Wow.

[blues deville]

The C-series may be a good or great airplane, but Bombardier made a huge mistake in trying to go up against the two big gorillas. Not even a fair fight really. I believe Embraer looked at the same potential marketplace and decided not to challenge the big guys.

Airbus responded to this perceived threat with the A320 Neo and Boeing to the A320 Neo with the 737 Max and together they squeezed Bombardier out of the marketplace.

It would appear the C-series proved to be a much greater technical challenge than management anticipated. To design and build an aircaft like the Cseries requires enormous technical and financial strength. Bombardier's estimated program costs have always seemed wildly understated.

It's too bad. Hopefully not another sad page in Canadian airplane making history.

[Super 80]

I believe Embraer looked at the same potential marketplace and decided not to challenge the big guys.

Embraer decided their energies were better directed at building a replacement for the thousand odd obsolete C-130's out there than building a 100-130 seat E-Jet.

Boeing wants to partner with Embraer to propose the KC-390 for the Hercules replacement competition.

[rudder]

I will say it again - CS100/CS300 are unfortunately not what airlines in North America are looking for (except for possible orders from UAL or AC which would be not greater than a 50 aircraft order per carrier. AC wants to ditch the remaining 190's and UAL needs more mainline aircraft in order to increase 76 seat regional fleet size). And other international carriers have not embraced the product size either.

I would look at offering a 2 class 150-165 seat configuration (CS500?) with good range. If you are going to take on Boeing and Airbus then you may as well take them on head on. At least with a family from 110-165 seats a major North American network carrier may see the flexibility and efficiency available and might consider a mixed variant order or at least go in for the largest version.

Another option is to return to the regional fold and downsize to a variant that meets North American scope limits and can compete with the E175 which has become immensely popular in North America.

[Lakelad]

.
Well, who could be better suited to make the announcement?

.

[Guest]

Seems to be Bombardier's day for good news.

Bombardier, Alstom snag $3.6-billion Belgian rail order

Published on: December 18, 2015 | Last Updated: December 18, 2015 10:09 AM EST

Bombardier Inc. and Alston SA won a joint contract valued at 3.3 billion euros ($3.6 billion) to supply double-decker cars to the Belgian national railway through 2021.

The first 445 wagons are slated for delivery starting in 2018, the trainmakers said in a joint statement. Montreal-based Bombardier’s share of the contract is worth 2.1 billion euros, with the rest going to the French manufacturer, they said.

Alstom, based in the Paris suburb of Levallois-Perret, completed the sale of its energy operations to General Electric Co. last month to focus on supplying the railway industry. Bombardier, which also builds planes, decided in November to sell a 30-per-cent stake in its trainmaking unit rather than hold an initial public offering in the business. The company will use cash from that deal to fund development of the C Series airliner, a project that’s behind schedule.

“The rail market is a dynamic market with a strong potential” tied to urbanization and mobility, Alstom Chief Executive Officer Patrick Kron told shareholders Friday at a meeting to approve a stock buyback.

Advertisement

Bombardier jumped as much as 8.6 percent, the steepest intraday gain since Nov. 25, and was trading up 8.6 percent at C$1.27 as of 9:33 a.m. in Toronto. Alstom rose as much as 1.6 percent and was trading up 1.4 percent at 27.61 euros in Paris, reversing a decline earlier in the day.

The French and Canadian manufacturers already cooperate on trains for the Paris region’s commuter network and Montreal’s subway system. Bombardier’s plant in Bruges, Belgium, will provide 65 steering cars and 290 trailer cars under the new contract, while Alstom’s factories in Valenciennes, France, and Charleroi, Belgium, will build 90 motorized cab cars and the trains’ control technology. http://www.cbc.ca/news/business/bombardier-cseries-friday-1.3371265

[Kip Powick]

If Bombardier does as well with this order as they did/are doing with the "New" Toronto street-cars this will be another contract that goes down the toilet.

[Guest]

I gather they have done very well on their sales (rail) outside of Canada. Must be something about Toronto.

[canadairguy]

It was good to see the C Series gain TC type certification this morning. It's been a long time coming.

[MD2]

Indeed, congratulations to Bombardier for a great aircraft and surely many sales ahead...

[Guest]

Bombardier sees ‘aggressive’ CSeries pricing for new customers amid 15-month order drought

‎Today, ‎December ‎21, ‎2015, ‏‎2 hours ago | Frederic Tomesco, Bloomberg News

Bombardier Inc. is prepared to cut prices on the CSeries jetliner as a way to end about 15 months without a firm order for the new single-aisle jetliner.

“I get the question all the time: ‘Are you finally going to discount?’ I know what it takes to win large orders,” said Fred Cromer, president of Bombardier’s commercial aircraft unit. Any new customer is “going to expect an aggressive deal.”

His comments signal a shift in how Bombardier is marketing its biggest aircraft ever. Under former chief executive officer Pierre Beaudoin, the Montreal-based company typically held firm on pricing — saying that new technology such as composite wings and an engine that will cut fuel consumption about 20 per cent should command a premium to competitors’ jets.

“Pierre was adamant that if you start pricing the plane at a big discount, it’s hard to ever get that back,” Chris Murray, an AltaCorp Capital analyst, said Monday. “His position was that customers would just recognize the value of the plane and pay up. That’s not what happened.”

Bombardier’s 243 firm orders for the CSeries are short of the company’s target of 300 by the time deliveries begin in the second quarter of next year. The company last booked a firm sale in September of last year, when a unit of Australia’s Macquarie Group agreed to buy 40 of the jets.

Bombardier’s shares had dropped 67 per cent this year through Friday. The stock rose 2.2 per cent to $1.40 at 1:37 p.m. Monday in Toronto.

Related

• Bombardier CEO Alain Bellemare says CSeries is en route for success
• Bombardier Inc CSeries jet gets green light for service from Transport Canada

Canadian Transport Minister Marc Garneau announced the certification of the CS100 — the smaller of two CSeries versions — at a media event Friday in Mirabel, Que. The CSeries program is more than two years behind schedule and its development costs have ballooned by $2 billion to $5.4 billion. Bombardier executives have predicted that sales would accelerate once the jet was certified.

Many of the orders now under discussion could include as many as 100 aircraft, including options, Cromer said in an interview Friday at Bombardier’s Mirabel factory, where the CSeries jets are built. He declined to identify would-be buyers.

“Mega-orders” are unlikely, he said. “It would be a combination of firm orders, options and the ability to continue to order. Would I eventually get to triple digits with some of the customers I’m seeing? Absolutely,” he said. “Is the initial order going to be triple digits? Probably not.”

It would be a combination of firm orders, options and the ability to continue to order

The CS100, which can carry 108 to 133 people, has a list price of $71.8 million, while the CS300, which can seat as many as 160 passengers, sells for $82 million. Prices are only one element of negotiations, Cromer said.

Customers “are going to want support, they are going to want spares, they are going to want training,” he said.

Bombardier is in talks with JetBlue Airways Corp. about a potential CSeries order, two people familiar with the matter said in October. Bombardier is also discussing the jet with Air Canada, said one of the people. Representatives for JetBlue and Air Canada didn’t immediately return a request for comment on Monday.

While North America is the “anchor region” for orders, Bombardier is talking with airlines from other areas, too, especially since the Paris Air Show in June, Cromer said. “There’s been lots of European interest coming out of the Paris Air Show. We’re also seeing some traction in the Middle East.”

Bombardier needs to capitalize on that momentum soon, said Murray, the AltaCorp analyst.

“Certification is a great thing, but 2016 is going to be critical for orders,” he said. “If they don’t start showing orders in the first half, the concern will continue to build.”

Bloomberg News

[dagger]

Every article on this I've seen for six months mentions Air Canada and JetBlue as potential buyers. The time for talking, however, is long gone. Bombardier has to move on price, and move large, to get an AC or JetBlue order

If Bombardier had discounted the CSeries years ago, to win another large airline anchor customer, it might not be in this pickle today. Instead, it wouldn't discount because it believed it had a better plane than the Max or Neo, and it may be right, but the marketplace wasn't going to pay a premium for a plane with no track record.

[rudder]

I recall visiting a VW dealership several years ago to look at a TDI. I remember vividly when inquiring about a discount off list price and was told no discount and that "I was lucky just to get a TDI".

That attitude stuck with me and needless to say I did not buy a VW (thankfully!)

Looks like BBD tried the same sales pitch and received the same reaction. Now both VW and BBD will be forced the readjust their sales techniques.

[rudder]

I am still predicting an AC order for 25 firm/25 options on the C series provided BBD will take the remaining 190's. Delivery positions 2018.

[dagger]

I am still predicting an AC order for 25 firm/25 options on the C series provided BBD will take the remaining 190's. Delivery positions 2018.

I think it will take some behind the scenes gifting by the feds, too. That might not be AC-specific, it could benefit the entire industry, but would certain serve as an inducement. I'm wondering whether the feds would be violating trade deals by exempting the CSeries on environmental and noise grounds - Chapter 4 plus most fuel efficient - from the federal excise tax on jet fuel. The feds could pick up the sky marshall tab (they should anyway, it's being covered by passenger security taxes). They could lower YYZ airport rents, it's a money grab, not a reasonable charge, and the airport could agree to lower fees accordingly, a significant percentage of the savings would flow to AC as largest airport operator. If the feds are generous enough, AC could even move E-175 flying to mainline. Finally, the ACPPA could be amended to eliminate the maintenance base location requirement.

Lowering some industry costs generally, or for the CSeries specifically, could also keep the Porter order alive by creating the economics to operate the jet out of YYZ. (Okay, that's a long shot).

[rudder]

I am not sure how much AC has tied up in the remaining 190's but if you consider 15 year financing with 10-20% down payment then it is not an insignificant number.

So, pay list for the C series and have BBD take the 190's for $10-15 million each or give AC a $10-15 million per ordered aircraft discount. Bottom line for AC is the 190 debt must be removed from the books in a market where demand for first generation 190's is limited to non-existant (save for DAL whom I am willing to bet got the 20 used 190's from Boeing for free in conjunction with the 737-900 order).

Another consideration is financing which may be an area that the Feds could help with. Not sure that EDC financing or EETC will work for the C series and not many banks or leasing companies have expressed an interest in holding title on C series airframes.

[neverminds]

Jazz now has an aircraft leasing division(ostensibly to lease out the Dash8-100s as they are removed from the fleet) But is there anything stopping them from placing an order for the C series and leasing the airframes to AC starting in 2020, with an eye to maybe getting scope relief in 2025 so they can operate them in house?