Published on June 8th, 2016 | by Jim Lee0
Bombardier C Series first visit to Dublin leads to first passenger flight to Zurich
On 1st June, just before 21:20, Bombardier C Series Flight Test Vehicle (FTV) 5, C-GWXZ, painted in SWISS colours, arrived in Dublin from Montréal. The aircraft was in Dublin for the International Air Transport Association’s (IATA) 72nd Annual General Meeting (AGM) and World Air Transport Summit. Gathered at the event in the RDS, were leaders of the global air transport industry and other stakeholders from governments, international organisations, aircraft manufacturers and other industry partners. While parked at the Dublin Airport, a number of those leaders, together with members of the press, visited the aircraft on the afternoon of the 2nd June, where Bombardier hosted visitors and conducted media tours.
“As we approach first delivery and entry into service with launch operator SWISS next month, it’s our pleasure to be showcasing the CS100 aircraft to influential industry leaders in Dublin during this premier IATA event,” said Fred Cromer, president of Bombardier Commercial Aircraft.
“Our execution has been flawless in 2016 and as our teams focus on meeting our commitments, we’re taking every opportunity to update the industry on our progress and continue to promote the C Series aircraft worldwide” he added.
On completion of its visit to Dublin, the aircraft undertook an historic first passenger flight to Zurich on 3rd June, carrying senior executives from about twenty Star Alliance member airlines and media representatives. In total, the aircraft carried 100 passengers, along with six Bombardier crew members, which operated the flight. The mood was jovial on-board with many of the VIPs chatting amongst themselves and touring the aircraft. With the passengers, their luggage and fuel on board, Bombardier confirmed to passengers, that its calculations indicated the aircraft, could have flown direct from Dublin to Montréal. Operating as the BBA-505, the aircraft departed Dublin at 15:13 local, and arrived to Zurich at 18:06 local, after one hour and 52 minutes of flight. The flight consumed 20% less fuel than competing single-aisle aircraft, currently flying that route.
“It was a pleasure to welcome our fellow Star Alliance Chief Executive Board members to Zurich in this special year, having flown on a very special aircraft – the Bombardier C Series – for which SWISS is the launch customer,” said Thomas Klühr, Chief Executive Officer, Swiss International Air Lines (SWISS). “We are really looking forward to welcoming the CS100 into our fleet when we take delivery in a few weeks.”
Carsten Spohr, chief executive of the Lufthansa Group, added that the flight was a “very special day” that was the culmination of “a decade of work between Bombardier and the group, whose Swiss subsidiary is the launch customer of the CS100”. He went on; “10 years ago, Lufthansa thought it was the time for a third supplier in the narrow body market,” adding “and we thought Bombardier was the right provider for that.”
“The IATA conference was a wonderful opportunity to showcase the C Series aircraft to leaders of the world’s major airlines,” said Mr Cromer. “Along with our friends at Star Alliance, we were able to offer their member airlines, a unique and exclusive opportunity to fly aboard the CS100 aircraft, from Dublin to Zurich” he noted.
“As we approach first delivery and entry-into-service with launch operator SWISS, showcasing the CS100 aircraft to Star Alliance members and media provided them with first-hand experience of the C Series aircraft’s flight deck and cabin in operation. The quiet, steep take-off and climb out to 37,000 feet (11,278 metres) impressed us all and the feedback has been overwhelmingly positive and complimentary – all in anticipation of the aircraft entering commercial service this summer. Our business case for the C Series aircraft is coming to fruition and we are confident that our strategic plan is on track,” added Mr. Cromer.
SWISS converts another five CS100s to 300s
As Bombardier’s C Series Flight Test Vehicle (FTV) 5, C-GWXZ, returned to Zurich, Mr. Klühr announced, that Swiss had converted five of its twenty CS100 firm orders, into the larger CS300 airliner. SWISS’ original order with Bombardier was placed in 2009 and consisted of 30 CS100s and he said this conversion, now brings the airline’s total C Series order backlog, to fifteen CS300s and fifteen CS100s. The carrier has the option of upgrading five more CS100s, with a decision due soon, he added. With the firm order conversion SWISS now holds firm orders for 15 CS100s and 15 CS300s plus 10 options.
SWISS will take delivery of its first, and the world’s first, CS100, HB-JBA, ex C-FPAI, (c/n 50010), later this month. As previously reported, the type is due to make its commercial debut on 15th July, with flights from Zurich to Paris CDG.
The larger CS300, on the other hand, is due to be delivered to launch operator, airBaltic, in September of this year.
Earlier, Bombardier Commercial Aircraft had announced, that SWISS had selected Bombardier’s Smart Parts Programme to provide component support for the airline’s fleet of 30 C Series aircraft. The 10-year agreement positions SWISS, as the launch customer for the C Series Smart Parts Programme, and provides the airline with comprehensive component maintenance, repair and overhaul (MRO) services, access to a strategically located spare part exchange pool, and an on-site inventory, based at the airline’s main hub in Zurich, Switzerland.
In a comment, Peter Wojahn, Chief Technical Officer, Swiss International Air Lines said; “The Smart Parts Program will guarantee part availability and provide us with a cost-effective solution for our component maintenance and spare part requirements. This will enable us to secure a successful entry-into-service and to operate our fleet of C Series aircraft to its full potential, while reducing maintenance-related costs and our own investments into spare components.”
Bombardier sees discounts key to C Series traction
Mr. Cromer continues to face pressure to sell the C Series, despite recent high profile orders from Air Canada and Delta Air Lines. In addition he and his sales team, face criticism from competitors over steep discounts, they had to give to gain these landmark orders.
Bombardier anticipates a roughly $500 million (around €439.75 million) loss, on the C Series orders it secured since the beginning of 2016, including commitments for up to 125 CS100s, from Delta Air Lines in April and the letter of intent for 45 CS300s, from Air Canada, in February.
Commenting at the IATA Annual General Meeting in Dublin, John Leahy, the chief sales person at Airbus said; “They’ve proven that they can give away the airplane,” adding “I’m not sure that giving away your airplane is a business case. They’ve not proven that they can sell the airplane profitably.” He went on to emphasise that the Canadian manufacturer “can’t make a business” booking a multi-million dollar loss on each aircraft.
Nevertheless, Mr. Cromer is optimistic about the programme, saying Bombardier has met the sales targets it set out for itself at the Paris air show in 2015 and responded by saying that he would “pay less attention to what people are saying, other than the customers,” adding “what the customers are saying is very different.”
Mr. Cromer and other Bombardier executives, still see discounts for the C Series, as key to gaining momentum, for the programme. “As we gain traction and gain momentum, and gain a broader customer base, then I think it becomes a different conversation,” Mr. Cromer, noted. He went on; “early in the programme, are we more aggressive to get that traction and get that penetration? Yes, we are.”
However, he agrees that Bombardier still needs to expand the C Series customer base, which currently includes less than 20 operators; though he sees interest and discussion from the leasing community, as a positive sign.
“We are getting to the point now with the programme and the backlog where the lessors are going to start taking a more serious look at the aircraft on a speculative basis,” he says. However, there is still some way to go as a number of large lessors have said in recent weeks that, despite liking the C Series, they are not yet willing to place an order.
To strengthen Bombardier’s commercial aircraft’s worldwide sales leadership team, Bombardier Commercial Aircraft announced on 24th May, the appointment of two accomplished senior sales leaders, to focus on capturing the growth and replacement opportunities in two key markets, namely Middle East & Africa, and North America. At the same time, further emphasis is being put on regaining Commercial Aircraft’s share of its core regional aircraft market, with the creation of a new dedicated regional aircraft position, within the organization.
Effective immediately, Jean-Paul Boutibou is appointed Vice President, Sales, Middle East & Africa; Christopher Jones is appointed Vice President, Sales, North America; and Kevin Smith will undertake the new role of Vice President, Regional Aircraft. Mr. Boutibou, Mr. Jones, and Mr. Smith will all report to Colin Bole, Senior Vice President, Commercial.
Malaysian C Series order in doubt as flymojo misses deadline
On 17th March 2015, at Malaysia’s Langkawi International Maritime & Aerospace Exhibition (LIMA), Bombardier Commercial Aircraft and Fly Mojo Sdn Bhd, announced that the parties had signed a Letter of Intent (LOI), for the sale and purchase of 20 CS100 aircraft, with options for an additional 20 CS100 aircraft. The announcement was made in parallel with the Government of Malaysia’s announcement at LIMA on a new airline, flymojo, which will be based out of Johor Bahru, Johor and Kota Kinabalu, Sabah. Upon execution of a firm purchase agreement, flymojo was expected to become the first customer and operator of the CS100 aircraft, in the region.
However, that C Series order must now be in doubt as flymojo had missed a 30th May deadline, for it to have formally commenced its AOC certification drive, with the Malaysian Department of Civil Aviation (DCA). Currently it only has a provisional licence, which allows it to seek funding and to purchase aircraft. The airline is also understood not to have submitted any request for an extension.
Canadian Federal Government “still engaged” in negotiations on Bombardier investment
A spokesman for Navdeep Bains, Minister of Innovation, Science, and Economic Development, in Canada’s Federal Government, commenting on investment by the Government, has said that they “are still engaged with the company,” but added that they would not be commenting on the content of the discussions,”
According to 154 pages of documents, obtained through a freedom-of- information request, which were sent by departmental officials to the Minister, in November and December last, Bombardier had signalled the Federal Government should match Quebec’s $1 billion (around €880.18 million) contribution to the company. A memo, signed by Deputy Minister John Knubley noted: “Over the last year the firm has taken many significant steps to shore up its position,” Those measures include naming Alain Bellemare as chief executive officer, suspending dividend pay-outs, and agreeing on $2.5 billion (around €2.2 billion) of cash injections from asset sales to Quebec’s government and the provincial pension fund manager. “Even with these steps, the firm has continued to use cash at a very fast rate,” it added
Mr. Bellemare speaking in Dublin at the International Air Transport Association’s (IATA) 72nd Annual General Meeting (AGM) and World Air Transport Summit said that talks with the Federal government, are ongoing. Earlier, he had described efforts to gain an investment from the Canadian Federal Government, as a “complex” proposition, and confirmed that Bombardier was “working” on it, although timing was uncertain.
He acknowledged the missteps and miscalculations by the company in recent years, but asserted it is on track now for success. “We have been through a pretty rough patch, but we have turned the corner,” he said.
Last October, the Quebec Government announced in that it was investing $1 billion, to take a 49.5% stake in a new subsidiary, which Bombardier will form to complete development, manufacture and support for the C Series aircraft.
Bombardier’s Belfast business suffers one of its ‘worst ever periods’
According to a report in the Belfast Telegraph, a decade of profits at Bombardier’s Belfast subsidiary, have been wiped out, after what it said was, one of its “worst ever periods” in its history. In 1989, the world’s first aircraft manufacturer, Short Brothers plc (Shorts), was acquired by Bombardier from the UK Government and since then it has become an integral part of the world’s third largest civil aircraft manufacturer.
Bombardier Aerospace, Belfast now specialises in major aircraft structures, including fuselages, wings, engine nacelle systems, and flight control surfaces in metal and advanced composites, from design through manufacture to after-market support. With first-class capabilities and a workforce of around 6,000, the Belfast operation plays a pivotal role in all Bombardier’s families of commercial and business aircraft.
Since it acquired Shorts, Bombardier has invested almost £2.5 billion, (around €3.18 billion), making Bombardier Aerospace the largest manufacturing company in Northern Ireland, which produces around 10% of Northern Ireland’s total manufacturing exports. An extensive supply chain includes around 800 approved suppliers in the UK and Ireland, and a further 100 in Europe. In addition to Bombardier programmes, customers include Airbus, General Electric, International Aero Engines, Irkut Corporation, Pratt & Whitney, and Rolls-Royce.
Bombardier Aerospace, Belfast, had a pre-tax loss of £235.6 million (almost €300 million), which it said in a statement had wiped out profits made over the last 10 years. In its results for 2015, the company said it was struggling with tough economic conditions around the world and a lack of new aircraft programmes. “2015 has proven to be one of the most challenging and demanding in the history of Short Brothers PLC, and these challenges will continue for the company as Bombardier is faced with ongoing global competitiveness issues influenced by market conditions.” However, the certification of the C Series has been the one bright spot in a very bad year.
In what is the largest single inward investment in Northern Ireland, Bombardier has invested £520 million (around €661.8 million) in the C Series, which has facilitated research, design, manufacture and assembly of aircraft wings. This has included the building of a purpose-built 600,000 ft² (55,741.85 m²) facility. The innovative carbon-fibre composite technology, developed in Belfast to produce the C Series wings, enables both material and aircraft weight savings, contributing significantly to the airliner’s game-changing economic and environmental credentials.
However, the C Series was around £1.4 billion (around €1.78 billion) over-budget and two years delayed, at the time of its launch – and the abbreviated annual report and financial statements issued by the company, said the operating loss of £194.6 million, (around €247.5 million), included an impairment of £248 million, (around €315.42 million), mainly relating to a write down on the C Series. It also referred to 360 Belfast job losses from its complementary labour force, but did not disclose any further job cut plans.
It has already announced that it is to let go up to 1,000 people from its 6,000-strong Belfast workforce between now and the end of next year, in line with total global job losses at Bombardier of 7,000.