Airbus sales chief slams CSeries,
once again:
Airbus sales chief doubles-down on CSeries attack
Flightglobal -- HAMBURG. Airbus’ top salesman is doubling-down with his long-running attack on the Bombardier CSeries family, arguing Delta Air Lines’ recent order for what he calls the “cute, little airplane” is not the breakthrough order that his Canadian competitor claims.
“They can’t make a business about losing $7 million an airplane,” Leahy told reporters on 30 May on the sidelines of Airbus Innovation Days. ...
“I could easily sell [the CSeries] for the $22 million or whatever they sold it for,” Leahy says.
Delta and Bombardier have not disclosed the selling price for the CSeries, and Leahy admits he cannot confirm the actual amount. “That’s what I heard,” he says. “I don’t know it for a fact.”
The $500 million provision, which Bombardier linked to “onerous”, or loss-making contracts, implies that Bombardier accepted an overall loss on the last three deals.
“I was talking to a guy at Delta,” Leahy says. “He said, ‘I’ve never been called ‘onerous’ before.” ...
Moreover, Leahy is highly sceptical that the CSeries will become a successful programme regardless of its recent sales victories. Leahy is unable to discuss Airbus pricing philosophy, so he referenced that of another competitor. Boeing, he says, would be happy to sell a 737 Max 7 in the high $30 million range or low $40 million range, with a healthy profit margin. Bombardier, however, would struggle to break-even on a unit basis with the CS300 in the same price range, he says.
The last paragraph echoes what I wrote about the asymmetric nature between Airbus/Boeing vs. Bombardier. The MAX 7 is at the bottom-end for Boeing but the CS300 is at the high-end for Bombardier. The stakes are entirely different.
Now, $22 million is
70% off list. This pricing level is way below any 'learning curve' adjustments and cannot be sustainable even with drastic manufacturing efficiency gains.
Airbus publicly "leaking" this price is clearly meant to make CSeries negotiations with potential customers more difficult and suppress the program's margins. Who's going to pay $35 million for the CS100 now? No one.
Per Reuters, Ethiopian Airlines is considering to buy 30 CS100 or Embraer E-Jet. So yet again the CSeries is competing against regional jets, and Ethiopian is demanding "a better deal" from Bombardier than what Delta received. They wont get it, but this may shape up as another lose-lose deal for Bombardier.
And any speculation that Bombardier and Airbus collaborated to win Delta's deal (vs. Boeing and Embraer) is thoroughly dead:
Airbus is clearly out to destroy the CSeries. There seems to be some bad blood between Airbus and Bombardier after the failed acquisition talks.