Liberal Party wins, Bombardier wins
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Bombardier removes Republic Airways from CSeries production schedule
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Bombardier removes Republic Airways from CSeries production schedule
MONTREAL - Bombardier has removed insolvent Republic Airways from the CSeries production schedule until it gets a clearer picture of the impact of the airline's bankruptcy proceedings.
The Montreal-based aircraft manufacturer says Republic's firm order for 40 CS300 aircraft placed six years ago remains in its backlog, but that it no longer has firm dates when the planes will be built.
Industry observers have long questioned the viability of the order with Republic since it changed its business model.
The planes were originally intended for former subsidiary Frontier Airlines, but that was sold in 2013, leaving the 120- to 160-seat planes too large for its remaining operations.
Republic's bankruptcy filing in February raised further questions about the order.
The Montreal-based aircraft manufacturer says Republic's firm order for 40 CS300 aircraft placed six years ago remains in its backlog, but that it no longer has firm dates when the planes will be built.
Industry observers have long questioned the viability of the order with Republic since it changed its business model.
The planes were originally intended for former subsidiary Frontier Airlines, but that was sold in 2013, leaving the 120- to 160-seat planes too large for its remaining operations.
Republic's bankruptcy filing in February raised further questions about the order.
Bombardier removes Republic Airways from CSeries production schedule
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It's a bit old but this piece would seem to indicate there may be other customers in negotiation. Freeing up the Republic slots may not be a bad thing.
Canada's Boeing challenger good times - Business Insider
Canada's Boeing challenger good times - Business Insider
Bombardier Inc’s Delta sale signals ‘beginning of the end’ of Boeing-Airbus duopoly:
From today's National Post:
Bombardier Inc wins $5.6-billion Delta order in key boost to CSeries program
“Just the other week, Bombardier Inc. let everyone see just how serious it is about joining the two leading OEMs and Embraer SA in the big pool, even if only in the shallow end for now.”
Moody’s called the CSeries a “formidable product offering,” and said Boeing and Airbus don’t have much to offer in the 100- to 150-seat market where the CSeries competes.
Bombardier likely won the Delta order for three reasons, according to Solomon: aggressive pricing, early availability of the jets and technical superiority.
“The mere presence of the CSeries will have at least an indirect (if not a direct) impact on the competitive dynamic between the two industry titans, causing them to sharpen their pencils even more on strategic campaigns,” Solomon wrote.
However, Moody’s concluded that Boeing and Airbus will retain “the lion’s share” of the large commercial aircraft market, with emerging competitors like Bombardier able to capture “only a relatively modest low-single-digit share.”
Bombardier Inc wins $5.6-billion Delta order in key boost to CSeries program
“Just the other week, Bombardier Inc. let everyone see just how serious it is about joining the two leading OEMs and Embraer SA in the big pool, even if only in the shallow end for now.”
Moody’s called the CSeries a “formidable product offering,” and said Boeing and Airbus don’t have much to offer in the 100- to 150-seat market where the CSeries competes.
Bombardier likely won the Delta order for three reasons, according to Solomon: aggressive pricing, early availability of the jets and technical superiority.
“The mere presence of the CSeries will have at least an indirect (if not a direct) impact on the competitive dynamic between the two industry titans, causing them to sharpen their pencils even more on strategic campaigns,” Solomon wrote.
However, Moody’s concluded that Boeing and Airbus will retain “the lion’s share” of the large commercial aircraft market, with emerging competitors like Bombardier able to capture “only a relatively modest low-single-digit share.”
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Airbus sales chief slams CSeries, once again:
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.
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.
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.
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.
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Leahy's come a long way since his Piper Aircraft days, for sure, but he's still just an American trash talker out to make a few bucks like a used car salesman. He's elevated Airbus sales to new highs, for sure. But darker days could lie ahead if the supply chain chokes or even hiccups.
Admit it or not, Bombardier's not just a pain in the ass to both A and B, but they've at least given Airbus a bloody nose.
When buyers begin to understand where the industry B.S. is coming from, they'll start to look at the truth and the truth is, the C series is in many cases, the better aircraft. The airlines will decide what they need, not some used car salesman, like Leahy. If it's the C series, they'll buy it for the best possible price.
What's new about that?
Willie
Admit it or not, Bombardier's not just a pain in the ass to both A and B, but they've at least given Airbus a bloody nose.
When buyers begin to understand where the industry B.S. is coming from, they'll start to look at the truth and the truth is, the C series is in many cases, the better aircraft. The airlines will decide what they need, not some used car salesman, like Leahy. If it's the C series, they'll buy it for the best possible price.
What's new about that?
Willie
Leahy's come a long way since his Piper Aircraft days, for sure, but he's still just an American trash talker out to make a few bucks like a used car salesman
Last edited by twochai; 14th Jun 2016 at 19:19.
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Well that escalated quickly...
Air Canada threatens to walk away from Bombardier CSeries over maintenance deal
More from: https://www.google.ca/amp/business.financialpost.com/news/transportation/air-canada-inc-threatens-to-walk-away-from-bombardier-inc-cseries-deal-if-legislation-over-maintenance-isnt-passed/amp
FINANCIAL POST --
Air Canada is threatening to walk away from its plan to buy up to 75 CSeries jets from Bombardier Inc. unless the federal government gives it more flexibility over where it does its maintenance work.
In testimony that appears to contradict the airline’s claims that politics had nothing to do with its decision to order the CSeries, an executive told a Senate committee reviewing changes to the legislation that governs Air Canada that it won’t buy the aircraft unless the government gives it more latitude.
“There are alternatives to the CSeries, as I’m sure you know. There are other manufacturers that make comparable airplanes.”
Air Canada is threatening to walk away from its plan to buy up to 75 CSeries jets from Bombardier Inc. unless the federal government gives it more flexibility over where it does its maintenance work.
In testimony that appears to contradict the airline’s claims that politics had nothing to do with its decision to order the CSeries, an executive told a Senate committee reviewing changes to the legislation that governs Air Canada that it won’t buy the aircraft unless the government gives it more latitude.
“There are alternatives to the CSeries, as I’m sure you know. There are other manufacturers that make comparable airplanes.”
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I doubt the politics you're implying has much to do with, or not as much as you think it has to do with this sale.
Politics is a pawn in almost everything people wish to negotiate, even this potential sale.
BREXIT results will certainly fan the flames of separation in Quebec in the weeks ahead. This could be another reason for Air Canada to reconsider their LOI.
Willie
Politics is a pawn in almost everything people wish to negotiate, even this potential sale.
BREXIT results will certainly fan the flames of separation in Quebec in the weeks ahead. This could be another reason for Air Canada to reconsider their LOI.
Willie
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Willie, you got that right on, Quebec might be a real problem thanks to Brexit. As for the Feds still trying to dictate Air Canada policy made during the privatisation deal,{ again to placate Quebec} borders on insanity! But with "Junior" at the helm don't look for too much logic in his decisions!
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Air Canada confirmed the CS300 purchase consistent with LOI
Finalizing this order ensures the strong momentum before world's greatest airshow.
Air Canada and Bombardier finalize C Series order | Skies Magazine - Aviation is our Passion
Air Canada and Bombardier finalize C Series order | Skies Magazine - Aviation is our Passion
Air Canada confirms $3.8 Billion order for 45 C Series jet from Bombardier.
http://finance.yahoo.com/news/air-ca...120808667.html
http://finance.yahoo.com/news/air-ca...120808667.html
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Yes, not very widely reported but Bill C-10 was passed last week amending the Air Canada Public Participation Act (ACCPA).
The amendment to ACCPA was apparently part of the deal negotiated with Ottawa as a condition for Air Canada's CSeries order, in addition to Quebec's agreement to drop their related lawsuit.
The government had hoped for smooth passage of Bill C-10 until it met heavy opposition from union (IAMAW). Bill C-10 effectively allows Air Canada to outsource the bulk of the airline's maintenance activities outside of the country. NDP, BLOC Quebecois and the Greens also tried to stall the bill.
Passage of Bill C-10 was the last "stumbling block" for Air Canada's CSeries deal. However, the damage was done. Public comments from Air Canada that they were prepared to "walk away" from the CSeries and that other manufacturers were making "comparable airplanes" represent a PR nightmare for Bombardier.
It's hard to argue that Air Canada's order was won solely on the basis of superior CSeries economics when clearly the deal was predicated on dropping lawsuits and amending legislation.
I'm sure John Leahy at Airbus and the folks at Embraer will use the Bill C-10 fiasco as another talking point when dealing with potential CSeries customers.
The amendment to ACCPA was apparently part of the deal negotiated with Ottawa as a condition for Air Canada's CSeries order, in addition to Quebec's agreement to drop their related lawsuit.
The government had hoped for smooth passage of Bill C-10 until it met heavy opposition from union (IAMAW). Bill C-10 effectively allows Air Canada to outsource the bulk of the airline's maintenance activities outside of the country. NDP, BLOC Quebecois and the Greens also tried to stall the bill.
Passage of Bill C-10 was the last "stumbling block" for Air Canada's CSeries deal. However, the damage was done. Public comments from Air Canada that they were prepared to "walk away" from the CSeries and that other manufacturers were making "comparable airplanes" represent a PR nightmare for Bombardier.
It's hard to argue that Air Canada's order was won solely on the basis of superior CSeries economics when clearly the deal was predicated on dropping lawsuits and amending legislation.
I'm sure John Leahy at Airbus and the folks at Embraer will use the Bill C-10 fiasco as another talking point when dealing with potential CSeries customers.
@ peekay4...
I see it in another way (more like the glass is half full)...
Let us not kid ourselves here... The airline world and its executives know the truth on how good this aircraft really is and they also know that Air Canada's words or threat was just political wrangling to get more out of the government.
I see it in another way (more like the glass is half full)...
Let us not kid ourselves here... The airline world and its executives know the truth on how good this aircraft really is and they also know that Air Canada's words or threat was just political wrangling to get more out of the government.
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LCCs as a rule will try to stick with one type as much as they can. Commonality is (almost) everything to cost savings. Pilots, maintenance, training, spare parts -- they must leverage the economies of scale.
But for most LCCs, the CS100 & CS300 cannot meet all of their needs on all of their routes. As an LCC, you'll want to fly 180 seats on some routes. So buying the CSeries means they must fly multiple types and give up on commonality and the savings that come with standardization. Unless the price of oil spikes back up to $150/barrel, that's not going to make economic sense.
The big exception would be brand new LCCs (startups) with no planes yet, planning to fly exclusively to smaller airports (city airports, vacation destinations, etc.)
But how many startup LCCs fitting this model will be introduced in the next, say, 5-10 years? Just a handful.
As a concrete example look at FlyMojo, the Malaysian-backed startup LCC that's signed an LOI to buy up to 40 CS100s. With crude at $50 and 4 Ringgit / USD, that venture is going nowhere.
Republic's parent company also hoped to launch a startup US domestic LCC with the CSeries, but again they couldn't make the numbers work.
Plus a lot of existing LCCs (like most airlines) have now locked in oil prices below $50 via futures contracts through 2023, so there's little reason for them to consider introducing a new type now, even if it's more efficient.
But for most LCCs, the CS100 & CS300 cannot meet all of their needs on all of their routes. As an LCC, you'll want to fly 180 seats on some routes. So buying the CSeries means they must fly multiple types and give up on commonality and the savings that come with standardization. Unless the price of oil spikes back up to $150/barrel, that's not going to make economic sense.
The big exception would be brand new LCCs (startups) with no planes yet, planning to fly exclusively to smaller airports (city airports, vacation destinations, etc.)
But how many startup LCCs fitting this model will be introduced in the next, say, 5-10 years? Just a handful.
As a concrete example look at FlyMojo, the Malaysian-backed startup LCC that's signed an LOI to buy up to 40 CS100s. With crude at $50 and 4 Ringgit / USD, that venture is going nowhere.
Republic's parent company also hoped to launch a startup US domestic LCC with the CSeries, but again they couldn't make the numbers work.
Plus a lot of existing LCCs (like most airlines) have now locked in oil prices below $50 via futures contracts through 2023, so there's little reason for them to consider introducing a new type now, even if it's more efficient.
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Yawn.
Yes. I've read lots about Peoplexpress, Southwest, Ryanair, Go. How they work.
I get the LCC thing.
I may not be an accountant, but like I've said, some LCCs may regret their aircraft choices.
Please try not to read any mystery or clever insight into a simple comment.
Or would you prefer I'd said some may NOT regret their choice of aircraft?
Let's agree to disagree.
Willie
Yes. I've read lots about Peoplexpress, Southwest, Ryanair, Go. How they work.
I get the LCC thing.
I may not be an accountant, but like I've said, some LCCs may regret their aircraft choices.
Please try not to read any mystery or clever insight into a simple comment.
Or would you prefer I'd said some may NOT regret their choice of aircraft?
Let's agree to disagree.
Willie
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This article reports that the Swiss Demo flight didn't go quite as planned but also gives a very good idea of how Swiss expect to use the CSeries. First commercial flight was during Farnborough.
Last edited by ICT_SLB; 16th Jul 2016 at 02:57. Reason: First commercial CSeries flight took place!