Bombardier announced Latvian flag carrier Air Baltic converted its remaining seven purchase options for CS300 passenger jets to a firm order. This brings Air Baltic’s total firm order to 20 planes under an agreement initially signed in December 2012. Based on the list price of the CS300, Bombardier says this firm order is worth about $506m.
Bombardier has faced headwinds with its CSeries – Airbus (especially) and Boeing have not made doing business easy. The Air Baltic decision, before its first delivery, to firm all its options is a strong signal of confidence. Since Air Baltic is already a Bombardier customer, the decision looks even better. For the airline, they must be confident enough that this bet is low risk.
Airlines are consolidating the world over. This means the market is shrinking and every deal matters. Airbus and Boeing are doing what they can to stymie Bombardier and Embraer from gaining a foothold over 100 seat segment. We have explained previously why it is to be expected that the big two will do whatever they can to protect their oligopoly. While Embraer is seen as a lesser threat, since its E-195 E2 cannot be stretched, the Bombardier CSeries is almost certainly going to be stretched to 150 seats and probably called a CS500. Which is why Bombardier attracts opprobrium from all sides.