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Both Airbus and Boeing are being aggressive to preempt Bombardier from winning key customers in the commercial aircraft market. As we noted in our C Series report in 2010, John Leahy at Airbus stated that Airbus wouldn’t make the same mistake that Boeing did when Airbus entered the market and that would be aggressive against the C Series. It appears that Boeing is taking the same path.

Boeing appears to have preempted Bombardier from a C Series order at United, and according to a article from Jon Ostrower at the Wall Street Journal. “Ray Conner, Boeing Commercial Airplanes chief executive, in an internal presentation on Feb. 10, said the first January deal with United was designed to block Bombardier from gaining a foothold with one of its most loyal customers, according to two people who heard his remarks.”

It appears that the two big players in the market afraid of the small competitor from Canada gaining a foothold. The question is why? There are a number of reasons:


The C Series is not and was not designed as a regional jet, but as a flexible small trunk-liner with full trans-continental range. This means, unlike regional jets that offered limited range, the C Series can compete with Airbus and Boeing across all narrow-body routes, including smaller routes for which “right sized” aircraft are needed. In addition, the interior, with fewer and wider middle seats, will be viewed as more comfortable by passengers, as it incorporates the latest in cabin design technology.


The C Series is a much more modern and efficient aircraft than either the A320neo or 737MAX families. While Airbus and Boeing have dramatically updated their A320 and 737 platforms, these program still date from 1989 and 1967, and have the same fuselage diameter and basic layout as their original designs. Think of a new car, with all of the bells and whistles, being built on platform designed in the 1960s or 1980 versus one designed in the 2010s. There’s no comparison. While with aircraft this isn’t as dramatic a difference as with automobile platforms, there are differences in technology.

The C Series has new materials, improved aerodynamics, and was optimized for new technology engines, rather than retrofitting them into an existing platform that in Boeing’s case, was designed when engines were still cigar shaped. Even with the same engine technology, there is no way the Airbus or Boeing could be as efficient as a C Series.

While lower fuel prices today reduce the economic differential from lower fuel burn, the C Series remains better in operating costs than its similarly sized competitors, the A319neo and 737MAX7, and about equal to their larger A320neo and 737MAX8 models. From its on-board monitoring systems that reduce maintenance costs to its lighter weight Aluminum-Lithium fuselage and advanced carbon fiber wings, it is simply a newer and better airplane.

Bombardier are the Masters of Stretch

A real concern in giving Bombardier a foothold is that it will stretch the C Series with larger models that compete directly with Airbus and Boeing’s larger models. Bombardier has reserved trademarks for CS500 and CS700, providing at least the possibility of future stretched models of the aircraft. Stretched models would put C Series in direct competition with the older designs for their bread and butter aircraft, and could negatively impact demand.

Return on neo and MAX Investment

The A320neo decision at Airbus was in part a reaction to the C Series, and closing the gap, since the CS300 has better operating seat-mile economics than the A320ceo, and is quite close to the A320neo because of its weight and fuel burn advantage. Airbus’ decision to be more aggressive against C Series led to Boeing rushing the MAX into development rather than developing an all-new narrow-body aircraft. Each of the two big OEMs has developed a new derivative model and generated 3,000-4,000 orders between them. They do not need to develop an all-new program today, as they need to capture the return on investment from their existing programs, expected to have a 10-12 year production run before the next generation of airplanes is announced.

What has resulted from the big duopoly are no narrow-body aircraft optimized to take advantage of today’s new generation of narrow-body engines, the Pratt & Whitney GTF and the CFM LEAP. Only Bombardier, Irkut, and COMAC will offer designs optimized around these engines, with Bombardier the only viable threat. Boeing’s financial catastrophe with the 787, and Airbus similar saga with the A380 highlight the risks of developing new aircraft. The big duopoly simply cannot afford another new aircraft development, and had to resort to compromise and low cost re-engining programs.

An All New Competitor Wouldn’t Differentiate Itself Today

Engine technology drives aircraft design. The C Series is the first airplane to be optimized for new technology engines, and designed from the ground up with those engines in mind. An all new aircraft from Airbus and Boeing would also be optimized for new technology engines, but wouldn’t likely gain significant competitive advantage over the C Series, since engine technology, systems, and materials technologies are already at the current state of the art.

Boeing and Airbus would look to the heart of their market for optimization, about 170 seats, for a new model. The C Series is optimized for 130 seats, and as a result is a much lighter aircraft, that could still be stretched. Just as today’s “shrink” models, the A318 and 737-600, are smaller models of designs of aircraft optimized for higher seating levels, an all new model from Airbus or Boeing could not easily compete with the CSeries in the 130 seat segment.  It is much easier to stretch than shrink, and Airbus and Boeing have moved customers to larger aircraft.

Airlines would Love a Third and Fourth Competitor in the Narrow-Body Market

While someday COMAC will become a major competitor, China is not yet ready to compete aggressively with Airbus or Boeing. Nor is UAC in Russia, although the Irkut MC-21 is, on paper, a better airplane than either the A320neo or 737MAX give its modern clean sheet design optimized for same the P&W GTF engines used on the A320neo.

But Bombardier and Embraer are here with their new offerings in the 100-130 seat class. The CS100 and CS300, combined with the E2-190 and E2-195, will give Airbus and Boeing a run for their money at the low end of the market between 100-130 seats.

The E2 jets, with four abreast seating, are already quite long aircraft and are therefore unlikely to be stretched. This has taken them off the direct threat radar screen, and Airbus and Boeing seem content to allow Embraer to remain in their market niche. But Bombardier, which can seat 155 in the CS300 in high density, and have an aircraft that can be stretched, is viewed as a threat.

What has been the result so far? For airlines that invited C Series to their competition, the results have been massive price concessions from Airbus and Boeing to keep Bombardier out. A number of campaigns that Bombardier was close to finalizing have been lost at the 11th hour with an offer too good to refuse. Our sources indicate that Easyjet, Vueling, and United have all received incredible pricing on aircraft to keep Bombardier out of the picture.

With deep pockets and highly optimized cost structures due to high production levels, Airbus and Boeing can undercut Bombardier, which must amortize their development costs over a smaller number of aircraft. As a result, it is difficult for Bombardier to match pricing to simply to gain a market foothold and lose money on each aircraft.

But is taking a great deal from Airbus or Boeing counterproductive in the long term for airlines?

Airbus and Boeing would love to see Bombardier fail. By taking the low priced order from Airbus or Boeing, and not the innovative competitor with superior technology, are airlines being myopic?

The Bottom Line

Bombardier has built a great airplane that can beat its competition from Airbus and Boeing. They would rather split the market two rather than three ways, and are doing everything they can to stop Bombardier.

Airlines that are taking attractive deals for aircraft not as well suited for their operations maybe are being short-sighted by failing to recognize why those prices are so low, and the reason they are being offered them.

The cream rises to the top, and Bombardier has built a superior aircraft. Airbus and Boeing are fighting a war, and Bombardier isn’t in a strong position to fight back. But the industry and the airlines need Bombardier, in ways they currently do not perceive.

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