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IATA: Bombardier sees discounts key to CSeries traction

Bombardier executives see discounts for its flagship CSeries as key to gaining momentum for the programme, responding to criticism from Airbus executives.

“As we gain traction and gain momentum, and gain a broader customer base, then I think it becomes a different conversation,” says Fred Cromer, president of Bombardier Commercial Aircraft, at the IATA AGM in Dublin today. “Early in the programme, are we more aggressive to get that traction and get that penetration? Yes, we are.”

The comments follow criticism earlier this week from Airbus sales chief John Leahy saying the Canadian airframer “can’t make a business” booking a multi-million dollar loss on each aircraft.

Bombardier anticipates a roughly $500 million loss on the CSeries orders its secured since the beginning of 2016, including commitments for up to 125 CS100s from Delta Air Lines in April and a letter of intent for 45 CS300s from Air Canada in February.

“I would pay less attention to what people are saying other than the customers," says Cromer. "What the customers are saying is very different."

Following its order for the CS100 in April, then Delta chief executive Richard Anderson said the CSeries was a “better piece of technology with better economics” than other aircraft in its class.

The Atlanta-based carrier also looked at the Airbus A319, Boeing 737-700 and Embraer 190 and E2 variants for its 100-seat aircraft need before ordering the CS100.

Cromer, however, does not see any of these aircraft as true competitors to the CSeries.

“If you look at the 100 to 150, 160-seat category, there really is no competitor other than the CSeries,” he says. “It is the optimised airplane that produces the best operating economics.”

Asked about United Airlines decision to order 65 737-700s instead of the CSeries earlier this year, Cromer says the US mainline carrier changed track mid-campaign.

“Had they stuck to their original mandate for a 100 seater, they would have come up with a different answer,” he says. “They chose to do something different.”

Competitor to Airbus and Boeing or not, Bombardier still has work ahead. A number of large lessors have said in recent weeks that, despite liking the CSeries, they are not yet willing to place an order.

“We can’t just have two blue chip airlines in North America and one unique situation in Switzerland [Swiss] where its replacing the Avro four engine aircraft,” said Steve Udvar-Hazy, chief executive of Air Lease, in May. “We need to have a bigger customer base.”

Cromer agrees that Bombardier still needs to expand the CSeries customer base, which Flightglobal’s Fleets Analyzer database shows includes less than 20 operators, as the aircraft enters service. However, he sees the discussion in the leasing community as a positive sign.

“We are getting to the point now with the programme and the backlog where the lessors are going to start taking a more serious look at the aircraft on a speculative basis,” he says.

The first CS100 is scheduled for delivery to Swiss in June and entry into service in July.

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