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New analysis concludes Bombardier will miss CSeries order target

Analysts at RBC Capital Markets have concluded Bombardier's goal of having 300 orders for its new CSeries narrowbody by entry into service in late 2013 is at risk.

The Canadian firm reached this conclusion after surveying 26 airlines, representing roughly 35% of the 100- to 149-seat aircraft operating globally, to gauge their interest in ordering the CSeries. Eleven of the carriers were headquartered in North America, eight in Europe, three in Asia and four in other regions.

RBC determined those carriers have significant interest in the aircraft, but no real sense of urgency to order the CSeries.

Only 7%, or 1.82 of the test group, said they would likely acquire the CSeries in the next five years. "This compares to over 20% of respondents indicating they would likely purchase Boeing's 737, and 18% for the Airbus A319neo," the analysts added. "There is significantly lower conviction towards the CSeries than towards its competitors in the near term."

The main driver behind interest in the CSeries failing to translate into orders is trepidation over introducing a new fleet type, with 50% of respondents ranking fleet commonality as their top concern.

Other hurdles included the price of the CSeries, development and execution risks and unproven performance data.

"We did look at the CSeries, but determined that the training would be too complex and expensive for our purposes," remarked one survey respondent.

Despite tepid interest by survey respondents in ordering the CSeries in the short-term, 22% - or 5.7 carriers - said they are likely to purchase the aircraft in the next 10 years or beyond.

The RBC analysts added that as additional development milestones are met, CSeries order traction should strengthen, and Bombardier will eventually capture a significant share of the 100- to 149-seat market, to allow for a return on the $1.7 billion the airframer is investing in the programme.

"We estimate that if Bombardier captures just 20% of the forecasted market share in the 100- to 149-seat capacity segment over the next 20 years, a positive ROI [return on investment] will likely be obtained," the analysts said.

Bombardier, in its commercial aircraft market forecast released earlier this year, estimated the 100- 149-seat aircraft fleet would reach 9,200 by 2030.

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