Bloomberg News

Bombardier Targets ANA to Japan Airlines for New CSeries

February 11, 2013

Bombardier Targets ANA to Japan Air for New CSeries Orders

Employees work on electrical harnesses for Bombardier jets at the company's manufacturing facility in Queretaro, Mexico. Photographer: Susana Gonzalez/Bloomberg

Bombardier Inc., an aircraft maker with more planes in Japan than Airbus SAS, wants to add a salesperson dedicated to the country to win orders from All Nippon Airways Co. and Japan Airlines Co. for its CSeries jet.

“Now is the time to add sales and marketing into the mix,” Andy Solem, vice president of sales for China and North Asia, said in an interview. “We’re very confident” that the CSeries will appeal to Japanese airlines, he said.

The planemaker sold its first plane in Japan about 20 years ago and may add a salesperson in Tokyo to complement a market analyst it hired, Solem said. Montreal-based Bombardier’s CSeries jet is set for its first flight in June and entry into service next year. The plane seats 110 to 130 passengers and will be a possible alternative to Japan’s first domestic-made passenger jet developed by Mitsubishi Aircraft Co., which fits 70 to 90 passengers.

“It’ll be tough,” said Ryota Himeno, an analyst at Barclays Securities Japan Ltd. “Mitsubishi is already heavily marketing its new jet and the more makes of plane that an airline operates, the more maintenance costs increase.”

Bombardier’s Solem says he is targeting airlines looking to replace older, smaller Airbus and Boeing Co. planes with its CS100 version, which seats 110 passengers in its standard configuration, and the CS300 which carriers 130 flyers.

Mitsubishi Aircraft won its first order for 15 Mitsubishi Regional Jets, plus 10 options, from ANA in 2008.

138 Orders

Bombardier had 138 orders for CS100 and CS300 models as of Sept. 30, according to a statement from the company. The biggest customer is Republic Airways Holdings Inc. (RJET:US), based in Indianapolis, which placed an order for 40 planes in 2010.

Mitsubishi Aircraft’s orders increased to 230, including commitments, in July after it won SkyWest Inc. as a customer. The Nagoya, Japan-based company’s jet is scheduled to make its first flight later this year and aims to hand over its first plane in 2015.

Japanese airlines had 56 Bombardier planes at the end of 2011, compared with 36 Airbus jets, according to Japan Aircraft Development Corp. figures compiled by Bloomberg. The carriers had 397 Boeing planes, the most of any maker, according to the group.

Bombardier’s widely traded Class B stock was unchanged at C$4.09 at the close in Toronto yesterday. It’s risen 8.8 percent this year.

Fuel Efficiency

Both the CSeries and MRJ Jet will use geared turbo-fan engines from United Technologies Corp.’s Pratt & Whitney that will help the planes burn 20 percent less fuel than current similar-sized airplanes, according to the plane makers.

ANA has received a briefing on the plane from Bombardier, Megumi Tezuka, a spokeswoman for the airline, said. Japan Airlines has also been briefed on the aircraft, Kazunori Kidosaki, a spokesman at the carrier said.

Both airlines are focusing on international routes for growth, and have ordered 111 Boeing 787s to allow the addition of new destinations. Japan Airlines cut 41 domestic routes as part of a turnaround plan.

“There may be more opportunity to sell to a new low-cost carrier,” said Himeno. “Japanese airlines have already shrunk their domestic routes to focus on profitable services.”

To contact the reporters on this story: Chris Cooper in Tokyo at ccooper1@bloomberg.net

To contact the editor responsible for this story: Anand Krishnamoorthy at anandk@bloomberg.net


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