Teal Group pours doubt on CSeries' prospects

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US aerospace consultancy the Teal Group remains sceptical about prospects for Bombardier's CSeries jetliner, despite publicized assurances from Lufthansa that the carrier is committed to its letter of interest (LOI) for 30 firm orders of the type.

The Teal Group recently removed the CSeries from its long-term forecast, saying the twinjets have less than a 50% chance of operating.

While a firm order from Lufthansa would be enough to put the CSeries back into the company's forecast, Teal Group VP analysis Richard Aboulafia says he is baffled as to why more LOIs for the CSeries have not been announced. "It would at least give the impression of commercial activities," he says.

Lufthansa insists it is committed to the LOI. "There is absolutely no change of plan. We still think the CSeries is a great airplane," says Lufthansa VP the Americas Jens Bischof.

In addition to the German operator's LOI, a second potential customer emerged this month when Mongolian carrier Eznis said it signed a LOI for seven CSeries twinjets.

Aboulafia blames a combination of factors of the lack of firm orders. "It is weak traffic, technological risk and relatively inexpensive fuel that diminish the appeal of promising new technology," says Aboulafia.

He also believes the CSeries production programme "screams risk" since Bombardier has tapped "this completely unknown Chinese company", Shenyang Aircraft Corp, which "will attempt to build something the likes of what they've never before".

He questions: "Why couldn't Bombardier get a blue chips aerospace outfit to work with?"

Bombardier points out for record that "just over 10% of the CSeries aircraft will be manufactured in China" and that Shenyang Aircraft Corp, a unit of the China Aviation Industry (which includes AVIC 1) "will provide the centre fuselage as well as the tailcone structure and doors of the CSeries".

The company says it remains committed to bringing the CSeries to market. The 110/130-seat CSeries is an aircraft family designed specifically for the 100- to 149-seat mainline commercial market. "We at Bombardier estimate that 6,300 aircraft representing more than $250 billion in revenue over the next 20 years fall into that category. This is not an insignificant market in which to be involved," says the firm.

Furthermore, it says the CSeries "is a programme that is launched, development is continuing and we are proceeding on all fronts according to schedule".