BUSINESS

Bombardier CSeries could generate buzz at air show, but orders are the wild card

06/10/2015 04:00 EDT | Updated 06/09/2016 05:59 EDT
MONTREAL - Bombardier is sending its new CSeries commercial jets on their maiden overseas voyage next week to generate buzz at the world's largest air show and help turn the page on the aircraft's disappointing launch.

For the first time, the public will get a close view of the US$63-million CS100 and larger CS300 aircraft that has a US$72-million list price. The smaller model 110- to 125-seat plane will be open for inside tours starting Monday at the Paris Air Show while the larger model with up to 160 seats will make flyovers during the first three days of the event.

Before the air show, the CS100 will stop in Zurich at launch customer Swiss while the CS300 will visit the wing fabrication plant in Belfast, Northern Ireland.

But industry observers will be watching to see if the Montreal-based manufacturer's new executive team can land some deals.

"I think it will be one of the buzz things at the air show (but) the hope is that they announce some big orders," said Karl Moore, a professor at McGill University's Desautels Faculty of Management.

Bombardier has failed in recent shows to deliver large orders. That could change as flight testing winds down ahead of certification later this year.

But the new president of commercial aircraft downplayed these expectations, saying his team doesn't feel the pressure to add orders at the show. Bombardier has just 243 firm orders, short of its goal of 300 by entry into service early next year.

"Sales is a 365-day a year job and to have so much concentration on Paris in my view is not necessarily productive," Fred Cromer said in an interview.

However, he said drawing interest at the show will help build momentum and allow the new team of executives with experience buying planes for airlines and leasing companies to leverage their contacts, experience and credibility to sign deals.

Colin Bole, senior vice-president of sales, said the air show will be a turning point after skepticism grew from the CSeries being two years late and US$2 billion over budget at US$5.4 billion.

"This is going to be the first time in 28 years that you're going to have an all new narrow-body aircraft at a major air show, so obviously that's creating a buzz already," he said.

Cameron Doerksen of National Bank Financial said he would be surprised not to see some commitments. He warned Bombardier's (TSX:BBD.B) weak share price could take a further hit if none materializes, especially from well-established airlines.

The aerospace analyst said the CSeries should shine at the air show because rivals Embraer, Boeing and Airbus have no new planes to showcase.

While orders remain a wild card, Cromer said Bombardier will reveal some of the test flight results that will show that the CSeries surpasses the promised performance for range capability, fuel burn and interior configuration.

Bombardier has promised that the CS100 powered by newly designed Pratt & Whitney engines will save 20 per cent on fuel and reduce operating costs by 15 per cent compared to similar planes on the market.

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