Today Bombardier announced a new C Series letter of intent for an order as part of its quarterly results. Market speculation immediately spiked. This has been an event everyone has been waiting for, especially after the announced alliance with Airbus.
Here is what we know: the customer is EU-based. That means deliveries will be from the Mirabel factory and is beyond the reach of the US Department of Commerce 300% tariff.
Here is what we have been able to discern. This order is not from an existing customer. This is a critical element because it means there is fresh interest in the program. While it would be wonderful for Bombardier if Lufthansa were to buy more aircraft, if Bombardier were to have a choice, a new customer is far more valuable. What this really means is that another customer has undertaken due diligence and found the C Series to be the best option for its fleet needs.
We have been able to discern that this order is for a combination of models. This is also very important as it means both the 110 seat CS100 and 135 seat CS300 continue to attract interest. Interest in both models is positive because it reflects momentum for the program. Critics have noted, with cause, that the C Series program has lacked momentum since the major orders last year. With recent activity, momentum has been regained.
A key question on everyone’s mind is how the Airbus deal with Bombardier impacted this customer’s decision? It likely had a supportive role. However, this customer had to be working with Bombardier long before the Airbus deal came to light. While the Airbus deal offers substantial market support, this new customer must have been well into its decision process before the Airbus deal was made public. But Airbus support does check off one additional box in due diligence, eliminating doubt about financing and the program’s future.
Momentum is building for the C Series as evidenced by the news leak from Cairo about a deal with EgyptAir. We expect that deal to be announced at the Dubai show, likely for CS100s. With the Airbus news now in the open, the market for the C Series feels different. Airlines and lessors can review and consider the C Series without anywhere near the risk and concern they had even three months ago. The engines are proving to be as effective as promised, even if they are delivered more slowly than everyone wants. The aircraft is doing better than anyone might have expected at SWISS and airBaltic, with the latter already increasing its order.
The C Series program may, at last, be breaking through the numerous barriers that have been thrown in its path. It now has Airbus on its side. This simplifies the work for Bombardier’s marketing and sales team just as it amplifies the market response to the aircraft.
Co-Founder AirInsight. My previous life includes stints at Shell South Africa, CIC Research, and PA Consulting. Got bitten by the aviation bug and ended up an Avgeek. Then the data bug got me, making me a curious Avgeek seeking data-driven logic. Also, I appreciate conversations with smart people from whom I learn so much. Summary: I am very fortunate to work with and converse with great people.