Bombardier Says New Airbus Plane Model Won't Affect CSeries Production

Airbus SAS’s decision to move ahead with its new NEO narrow-body model “doesn’t really change” customer interest in Bombardier Inc.’s new CSeries model and validates the Montreal-based planemaker’s choice of engine offering, an executive said.

“What they’re doing is upgrading their existing airplane with a new engine, which does help, but it still really can’t compete with a new CSeries,” Gary Scott, who runs Bombardier’s commercial aerospace division, said in an interview today. “We’re delighted actually that Airbus has endorsed the geared turbofan and our engine selection.”

Bombardier, which reports third-quarter results tomorrow, uses Pratt & Whitney’s geared turbofan as the sole engine on the all-new CSeries, slated to debut at the end of 2013. The model, which starts at 110 seats, aims to compete with Airbus’s smaller models, a market Bombardier projects at about 6,000 aircraft. Scott said the company should win about half of that market.

Airbus’s announcement intensifies competition with Boeing Co., whose 737 is the world’s best-selling aircraft. Boeing isn’t committing yet to a new engine for its 737 or a replacement aircraft, Nick West, a spokesman, said in an e-mail.

“We always assumed -- assumed -- Airbus and Boeing would build all new airplanes. So our business case hasn’t changed in that regard,” Scott said

Twin-Engine Models

Existing narrow-bodies, including the current A320 and 737, are twin-engine models that seat about 125 to 185 people. List prices for each plane range from about $65 million to $95 million, depending on the version.

“Airbus’s decision validates the Pratt engine,” said Henri Courpron, chief executive officer of aircraft-lessor International Lease Finance Corp. “It’s good news, as it puts Bombardier at the forefront of what’s becoming a new standard in terms of efficiency -- and Bombardier’s plane will be available before.” Still, now the CSeries will have another platform to compete with, he said.

Bombardier remains in “advanced discussions” with a handful of customers, Scott said. He declined to say orders may be announced by the end of this year.

“We like to set these arbitrary dates, ‘by the end of the year,’” he said. “Contract negotiations don’t march to arbitrary dates. They finish when they finish. I would say we look forward to new orders in the not-too-distant future.”

Economic conditions are the main driver of airline choices, and airlines are in a “much better mood” Scott said.

“The economy and the health of the airlines is the No. 1 one issue,” Scott said. “Fortunately, the economy has been moving in the right direction for a while.”

To contact the reporter on this story: Rachel Layne in Boston at rlayne@bloomberg.net.

To contact the editor responsible for this story: Ed Dufner at edufner@bloomberg.net

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