Bombardier CS100 unveiling.
Bombardier took the wraps off its USD$3.4 billion challenge to industry leaders Boeing and Airbus on Thursday, announcing "solid progress" on the development of its largest plane to date.Bombardier's single-aisle CSeries planes, now promised with seating for up to 160 passengers, represent the company's attempt to break into the lower end of a 100- to 200-seat marketplace heavily defended by its US and European rivals.China and Russia are also preparing to challenge the trans-Atlantic duopoly over the largest segment of the global jet market, valued at USD$2 trillion at list prices over the next 20 years."The CSeries aircraft programme is making solid progress, having met a number of key milestones over the last few months," Mike Arcamone, president of Bombardier Commercial Aircraft, said in a statement."We are now focusing on three key areas that will lead to our safety-of-flight permit: static airframe testing, building of flight test vehicles and on-the-ground testing."Bombardier, based in Montreal, is the world's fourth-largest plane maker, with a stable that includes regional jets and a range of executive aircraft.SERIOUS CONTENDERA large screen lifted at the end of a glitzy slide presentation to show off the new plane to analysts and reporters at its Mirabel facility near Montreal, and said it was transitioning to flight testing ahead of a first flight scheduled by the end of June."It's not a paper airplane, it's a real airplane," Arcamone said. It's not a re-engined aircraft we are putting into the market... I can tell you we are a very serious contender."At list prices, the 110-seat CS100 costs USD$62 million and the 130-seat CS300 USD$71 million. In contrast, the Boeing 737 MAX costs USD$82 million and the Airbus A319 neo USD$88.8 million.Bombardier on Thursday said it would also offer a CS300 with an option for up to 160 seats, either as an initial order or as a retrofitted plane."The CSeries aircraft is a game-changer in a changing economic environment, and following keen customer interest and market trends, we have enhanced the productivity of the CS300 aircraft further by offering the extra capacity seating option," Arcamone said.A company statement said Bombardier had 148 firm orders for the aircraft as of December 31, but Arcamone said that number was now "close to 180".A big buyer is Germany's Lufthansa, the first airline to put in a firm order.That compares with 1,064 orders for Boeing's competing 737 MAX and more than 1,440 for Airbus' neo family, although only a small fraction of those orders is for the smaller models that compete directly with the CSeries.NO DISCOUNTS NECESSARYBombardier's slowly growing order book has raised concerns that the company does not have the appetite to lure customers with deep discounts, as Boeing and Airbus do, or provide financing offers and walk-away rights.Bombardier chief executive Pierre Beaudoin has said he does not need to provide discounts, arguing the CSeries offers meaningful competitive advantages to airlines.The CSeries claims a 15 percent cash operating cost advantage and 20 percent fuel burn advantage over the Boeing and Airbus models as its airframe is lighter.It uses conventional batteries rather than the lithium ion batteries that have caused so many troubles for Boeing's 787. "We are very glad about that decision," Arcamone said.Airbus and Boeing have moved to defend their strong market shares by adding fuel-saving engines similar to those on the CSeries to their own best-selling models.That is a draw for airlines preferring to stick with existing suppliers, whose aircraft pilots are already certified to fly and where spare parts are plentiful. Numerous repair stations are already qualified to service the competing jets.Bombardier, which says it expects orders for the CSeries to pick up once the aircraft has made its maiden flight, has targeted 300 firm orders by mid-2014, when the jet enters service. It is seen as an ambitious launch schedule, with little room for error. Source: Reuters
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