Order drought for Bombardier CSeries jet extends to Dubai Airshow

TORONTO Mon Nov 18, 2013 12:14pm EST

TORONTO Nov 18 (Reuters) - Canadian plane maker Bombardier Inc failed to announce any sales for its CSeries jet in the opening days of the Dubai Airshow, extending a five-month drought in demand for the all-new model as larger rivals clinched multi-billion dollar deals.

Bombardier has struggled to win orders for its CSeries narrowbody against models from Boeing Co and Airbus . The CSeries has a development cost of C$3.4 billion ($3.25 billion).

Bombardier instead announced on Monday two conditional deals for up to 12 of its Q400 short-haul turboprops, worth a total of $423 million at list prices.

Gulf airlines went on a $150 billion buying spree on Sunday, the first day of the air show, a major aerospace industry event.

Dubai-based airline Emirates led the pack, with an order for 150 of Boeing's new 777 mini-jumbo jets, worth $76 billion at list prices. It also ordered 50 Airbus A380s, the world's largest passenger plane, worth $23 billion.

Bombardier shares, which fell sharply at the end of October after the company said it was reviewing its CSeries schedule, added 5 Canadian cents to C$4.69 on the Toronto Stock Exchange on Monday.

Stonecap Securities analyst Scott Rattee said the stock, trading broadly in line with the market, may be buoyed by news over the weekend that Bombardier's new Learjet 75 business jet got Federal Aviation Administration certification.

"I don't know that there was a high amount of expectation going into this particular show," Rattee said. "In terms of the CSeries, I don't know that this was going to be a headline-grabbing show for them."

Many investors and analysts are worried that Bombardier cannot meet a rigorous schedule that targets CSeries entry-into-service in September 2014 - one year after its thrice-delayed first flight - and now see the first quarter of 2015 as more likely.

That uncertainty, coupled with aggressive price cutting by rivals, is partly behind an anemic CSeries order book. Bombardier has 177 firm orders, signing its last in June with Ilyushin Finance Co, but has repeatedly said it expects to have 300 firm orders by the time the CSeries enters service.

Bombardier management said in October that it had seen a pick up in CSeries interest from customers in the Middle East, said RBC Capital Markets analyst Walter Spracklin.

"There have been several prospective customers in the region since the launch of the CSeries program; and this could just be the air show in which one transacts," the analyst wrote in a research note on Monday.

CSeries orders could also come from airlines including Indonesia's Lion Air, Air Canada, Swiss Air, Flydubai, American Airlines, Nigeria's Arik Air and a Chinese carrier, he wrote.

Bombardier's letter of intent with leasing firm Palma Holding Co, which covers four firm orders and four options for the Q400s, is worth about $282 million at list prices. Palma plans to lease four planes to Ethiopian Airlines, Bombardier said.

Abidjan-based airline, Air Cote d'Ivoire, signed a conditional purchase agreement for two Q400s with options for two more. The two firm orders are valued at about $69 million at list prices, swelling to $141 million if options are exercised, Bombardier said.

At the end of September, Bombardier had booked 476 orders for Q400 turboprops.

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Comments (1)
Paolins92 wrote:
In fact, Bombardier signed up a commitment on the following day for up to 16 CSeries aircraft with Iraqi Airways.

Nov 24, 2013 6:27am EST  --  Report as abuse
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