Bloomberg News

Bombardier to Help China’s First Jetliner Win Overseas Approvals

June 10, 2012

Bombardier Inc. (BBD/B) plans to help Commercial Aircraft Corp. of China win overseas approval for the in-development C919 plane that’s leading the country’s challenge to Boeing Co. (BA:US) and Airbus SAS.

The Canadian aircraft maker can help Comac as it has experience from winning approvals for 26 regional and business aircraft worldwide over 20 years, more than either Boeing or Airbus, Senior Vice President Chet Fuller said in an interview in Beijing yesterday, where he is attending the International Air Transport Association annual meeting.

Bombardier is working with Comac on new aircraft to help cut development costs and to gain greater access in China as it works on its own CSeries plane. The CSeries, which sits 110 to 145, competes against the smaller versions of Boeing and Airbus narrowbody planes.

“We intend to have much more success in China,” Fuller said. Montreal-based Bombardier has sold fewer aircraft in China than Boeing or Airbus, he said. The planemaker said it has sold 75 business jets and 30 commercial aircraft in Greater China.

Bombardier and Comac said in March that the C919 and CSeries would share a common cockpit, paring research costs and boosting the appeal of the planes as pilots will be able to fly both of them with little extra training. The two have also committed to joint-purchasing of aluminum alloys and Chinese companies will supply parts including the fuselage for the CSeries.

“Bombardier signed its first big cooperation agreement with China five years ago but it hasn’t gotten any CSeries orders in return,” said Richard Aboulafia, vice president for Teal Group, a Fairfax, Virginia-based aviation forecaster.

Complementary Planes

The C919 sits 168 passengers, compared with about 150 in the Airbus A320 and Boeing 737. It’s also larger than the CSeries, which means the two planes don’t directly compete, Fuller said.

“The Comac C919 is a direct competitor with both the Boeing and Airbus single-aisle products and not a competitor with us,” Fuller said. “We’re more complementary to the C919.”

Comac has said it expects the C919, China’s first large passenger jet, to perform its first test flight in 2014 and to enter service in 2017.

Bombardier has no specific dates in mind for when it expects the plane to get Western certification, Fuller said. Certification begins with the development of the plane, however, as every step in designing and building the jet needs a paper trail for the authorities.

Bombardier won its first pledge for a CSeries order, from Deutsche Lufthansa AG, in July 2008. Four years later, it has 138 firm orders from 11 customers. The aircraft is due to enter service late next year.

Magic Number

The planemaker wants to have as many as 30 customers by the time the aircraft starts flying commercially and to boost this to 40 within the following two years, Fuller said.

“Forty’s the magic number,” he said. ‘That’s when the plane becomes financially liquid, and the whole goal for us is to remove the liquidity premium.”

That is, a plane must have a critical mass in the market so that financial backers for airlines or lessors feel confident they can find a market for planes if they need to sell them at some point.

Bombardier is talking to 70 potential airline customers, Fuller said. He declined to comment on whether it expects to capture new business by the Farnborough Air Show in July, an event manufacturers often use to trumpet orders.

--Andrea Rothman. Editors: Neil Denslow, Garry Smith

To contact Bloomberg News staff for this story: Andrea Rothman in Beijing at aerothman@bloomberg.net

To contact the editor responsible for this story: Neil Denslow at ndenslow@bloomberg.net


Burger King's Young Buns
LIMITED-TIME OFFER SUBSCRIBE NOW

(enter your email)
(enter up to 5 email addresses, separated by commas)

Max 250 characters

Companies Mentioned

  • BA
    (Boeing Co/The)
    • $123.15 USD
    • 0.09
    • 0.07%
Market data is delayed at least 15 minutes.
 
blog comments powered by Disqus