az, 29 90 eneurs Snes wl ave arias [CBC Noe | Evart Wed Bombardier's CSeries dogged by low oil, risk-averse airlines | CBC News Bombardier's CSeries dogged by low oil, risk-averse airlines Fall in fuel prices sees companies sticking with older, less efficient jets, analysts says Sean Davidson » CBC News « Posted: Oct 08, 2015 11:00 AM EDT | Last Updated: October 8, 2015‘Bombardier was unable to win a single order for its new CSeries planes at the Paris airshow in June and, with only 243 firm orders signed for the CS100, is still short of the 300 it sought to have lined up by the time the commercial aircraft are due to enter service next year. (Christinne Muschi/Reuters) The difference between a "desperate" and "creative" move is, in business, often a matter of opinion and spin, But the aerospace industry cocked a collective eyebrow nonetheless on Tuesday with word that Bombardier had, however briefly, eyed its rival Airbus asa potential partner on its new CSeries jets. True, the new family of jets — now more than two years overdue and billions of dollars over budget — has been a millstone around the neck of the Montreal-based company,sous sono sen Soe dg yo avon vte | SB aus ae Wed ‘+ Bombardier’s CSeries and why you have a stake in its success + An in-depth look at Bombardier's CSeries ‘+ Bombardier, Airbus end talks over CScries jet investment ‘The company was unable to win a single order for the CSeries at the Paris airsho June and, with only 243 firm orders signed for the C100, is still short of the 300 it sought to have lined up by the time the commercial aircraft are due to enter service next year. Even for an industry prone to long delays and cost overruns, the development of the Series has been rocky and has battered Bombardier’s balance sheet. The fuel economy bugaboo is nowhere near as strong as it used to be.— Rick Erickson Some analysts wondered why Bombardier would even consider selling a majority stake in the $5.4-billion US project when it's seemingly just a few months away from finally paying off. The offer was "either not real or very desperate,” analyst Richard Aboutafia of the Teal Group said. xin are camiane ac OPTED Meebo ha, wesents ete a yw eves tas [OBC How [Ear Web Karl Moore, an aviation expert and associate professor at Montreal's McGill University, agrees CSeries sales have been disappointing, "The industry is nervous because [the CSeries] is so late," he says. "They want to see it working and saving on fuel." Part of the problem 's with But fuel efficiency could be part of the problem, Bombardier is building the C light-but-strong carbon fibres that are expected to cut fuel consumption by 20 per cent. That was a big selling point when oil was trading at $100 a barrel. But with fuel prices now back down to earth, some experts say airlines are less inclined to shell out for new, expensive and unfamiliar planes, xin are camiane acorn OPTS AeA Meebo ha, wesana s2900 Senbrdue Coan pelo avn area |SBC Naw |e We After almost 10 years in development Bombardier’s new CSeries 100 made its maiden fight from Mirabel airport north of Montreal on Sept. 16, 2013. (Ryan Remiorz/Canadian Press)sentra adn eaves tas [CBC How [Ear eb "The fuel economy bugaboo is nowhere near as strong as it used to be," says Calgary- based industry consultant Rick Erickson, "You've got people going out and paying $280 million for a new [Boeing] 777. But with oil at $40 a barrel you really don't need those fuel economies. Why not fly your $15- million Boeing 767 — an airplane from the '80s and '90s? "Even though it’s got higher maintenance costs, even though it's got higher fuel bum costs, you can still live within the pricing envelope.” The drop in oil prices has put a damper on sales across the aerospace sector, he said "Boeing and Airbus aren't happy about it either.” David Tyerman, a transport industry analyst with Canaccord Genuity, predicts the CSeries will make it to market next year. But even the expected boost to its bottom line, Bombardier will need to raise between $700 million and $800 million by 2018 — possibly by selling its railway division — if it's to maintain its minimum liquidity. "We think that's the only one that's really going to raise a decent amount of money," he said. xin ae camiane acorn OPTED Nebo ha, “sen Soe dg yo avon vte | SB aus ae Wed Selling a 25 per cent stake could bring in $1.5 billion, he says. An IPO could come by the fourth quarter of this year, Too small? Too big? CSeries jets will seat between 100 and 160 people — building on the success of Bombardier's CRI line of planes and putting the company in competition with the some of the smaller aircraft made by industry giants Boeing and Airbus, The CSeries has already drawn praise from some discerning buyers around the globe. Its first confirmed buyer was Swissair, a division of Germany's famously demanding Lufthansa, "That's very significant,” says Erickson. "If you can convince Lufthansa to buy your airplane — wow, that's an endorsement." But they're not right for everyone, including some Canadian carriers. WestJet is apparently happy with its Boeing planes and the CSeries is a little small for Air Canada, which tends to use aircraft that seat between 160 and 200 passengers. xin are camiane acorn OPTS AeA Meebo ha,sen Soe dg yo avon vte | SB aus ae Wed And yet, those same jets are apparently too big for Air Canada’s regional partner Jazz, says Erickson, because of clauses in union contracts that prevent Jazz pilots from flying planes with more than 150 seats. Air Canada unions are not happy if Jazz pilots are flying larger planes,” he says. ‘+ Bombardier shows off CSeries at Paris Air Show ‘+ Bombardier eliminates 1,750 jobs ‘+ Bombardier stock falls after Fitch gives it a negative outlook ‘+ Bombardier turned down Chinese bid for rail unit: report Bombardier does have a buyer in Porter Airlines, which has long planned to fly the series out of Toronto's Island Airport, pending extension of its runway, But some residents have vigorously opposed the expansion over fears the addition of jets to the small aixport will bring too much noise to the island's park-like atmosphere. Erickson is a fan of the CSeries, calling it a "knock-out-of-the-park winner.” But for now, Bombardier faces the challenge of closing deals in a market full of airlines that are taking a wait-and-see approach. "Quite a few carriers are sitting on the sidelines waiting to see what [the CSeries] does.” xin are camiane acon TTBS AeA Nee tah hat, wsana sanem Senears ne coon wl aan xin ae camiane acorn OPTED Nebo ha,