Bombardier lands $3.1B US airliner deal
Bombardier Aerospace has a $3.1 billion US deal to sell 40 of its CS300 jet airliners to Republic Airways Holdings, a U.S. operator of 1,600 daily flights under half a dozen different airline names.
There is a firm deal for 40 of the planes, and an option on another 40, Montreal-based Bombardier said in a news release Thursday. If the option is exercised, the deal will be worth $6.3 billion US to Bombardier.
With the Republic order, Bombardier now has 90 firm commitments for the longer-range, economical and low-emission planes.
Deliveries will start in 2015, Republic said.
The planes will be configured as a single cabin for 138 passengers.
"The CS300 will help us dramatically reduce our fuel consumption and impact on the environment," Bryan Bedford, chairman, president and CEO of Republic, said in a news release.
Republic, based in Indianapolis, operates 283 planes and owns Chautauqua Airlines, Frontier Airlines, Lynx Aviation, Midwest Airlines, Republic Airlines and Shuttle America.
Comment is being posted at
Comment is being posted at the quality of the Republic Airways deal....
Big CSeries Order – Big Deal, Who Cares - Airbus & Boeing Don't
Republic Airways is a much bigger winner out of this deal than Bombardier. The CSeries racks up a big win through a loss-making deal that Airbus and Boeing would never have entertained.
Bombardier may have all but doubled its anaemic CSeries backlog with this new order, but its not hard to see that it has lost more than it has gained.
This “Power Point Jet” has fundamentally missed the biggest order bonanza in history and now against a backdrop of falling demand, Republic Airways Holdings has capitalised on Bombardiers weakness with the CSeries to rack up significant concessions and support for committing to an airplane rejected as often as the Airbus A380.
The Pratt & Whitney PurePower PW1000G GTF engine has proven to be an equally resounding business failure thus far and this order changes nothing.
The GTF is still unproven, missing fuel burn targets, thrust restricted and a glance at the asterisk in the press release shows that the mooted “20% fuel burn reduction” is based on “estimates” of a 500nm stage length that is wholly unrepresentative of any short haul rout that is served by the competing Airbus A319 or Boeing 737-700 anywhere on Earth. Nor does it provide details of what passenger/freight load is involved – but you can sleep soundly at night knowing it’s at least 25% less than what the Airbus A320 and Boeing 737 families offer.
The GTF engine is challenged to deliver what Pratt & Whitney claims – the debacle over the PW6000 engine is a lesson they’re still learning and Airbus is clearly in no hurry to commit to the GTF to power its A320 family. Hence why they want IAE to offer a competing engine.
Highlighting lower cash operating costs of the CSeries is also disingenuous – when operators look to raise capacity, revenue and flexibility, the CSeries’ inefficient and outmoded 5-abreast seating configuration doesn’t cut it. The wider 737 and A320 can still fill more revenue paying passengers over greater distances, negating such cost advantage while delivering better yields.
And with the upcoming re-engine efforts on both airplanes, the CSeries will fall behind even more.
Since Lufthansa refuses to take first delivery or operate the first CSeries examples, Republic Airways walked away with many guarantees that only widebody jets like the 787 and A350 could support.
While it’s certainly good news for Bombardier that after six years, one-false-start-and-a-relaunch later that it has increased its customer base by 50%, the market rejection of the CSeries as witnessed by record orders and deliveries of A320s and 737s proves beyond doubt that airlines are not buying the hype.
What they want are new engines on the A320 and 737 to deliver the killer punch in operating economics – they’re simply not interested in an airplane whose market prospects look as bright as an extinguished candle.
When everyone else decided to walk away from this deal, what does that tell you about how this order was "won"?