MIAMI — Bombardier and Air Canada announced today the subscription of a Letter of Intent (LoI) for the purchase of up to 75 CSeries CS300. The deal contemplates 45 firm orders plus 30 options, and includes conversion rights to the CS100 under certain circumstances. Based on the list price, the order is valued at approximately US$3.8 billion.
At a press conference held in Saint-Laurent, Québec, Calin Rovinescu, President and Chief Executive Officer, Air Canada, along with members of his leadership team were hosted by Alain Bellemare, President and Chief Executive Officer, Bombardier Inc, Fred Cromer, President, Bombardier Commercial Aircraft and Rob Dewar, Vice President, C Series Aircraft Program.
The announced aircraft order comes as part of the narrowbody fleet renewal plan of Air Canada, which started in December 2013 with the acquisition of 61 Boeing 737 MAXs. The plans outlines the retirement of 45 Embraer E190s. 20 of these will be taken by Boeing as part of the 737 MAX deal, while the remaining 25 aircraft will be replaced by the CSeries. The Boeing 737 MAX deliveries are scheduled to begin in late 2017 and extend to 2021, while the deliveries of the CSeries are scheduled to start in late 2019 and extend to 2022.
“The renewal of our North American narrowbody fleet with more capable and efficient aircraft is a key element of our ongoing cost transformation program —plus the enhanced passenger cabin comfort provided by the CS300 will help us to retain Air Canada’s competitive position as the only Four-Star international network carrier in North America” said Rovinescu.
Fred Cromer highlighted the order as a “strategic marker” for the program, and added that the company is “looking forward to further strengthening a relationship that spans 30 years.” To date, Air Canada Express regional partners operate a mix of over 120 regional jets and turboprop aircraft, mostly comprised by Bombardier models.
According to Rovinescu, Air Canada was “one of the launch customers for the Canadair Regional Jet, and today’s announcement reflects our continued support for Canada’s aerospace industry and for the new technologies the industry may develop.
With this agreement, the Montréal-based manufacturer has now received 678 firm orders and commitments for the both variants of the CSeries —the CS100 and the stretched CS300. Swiss will be the launch customer of the CS100, and the aircraft is expected to enter service in the first half of the year. Last December, the CS100 obtained its certification type, and the CS300 is on track to receive it in the next months.
Air Canada is posed to be the first North American carrier to operate the CSeries. Although Porter Airlines planned to rely on the CSeries for its expansion, the elected Liberal Canadian government reiterated its commitment to not allow jet aircraft at Toronto’s Billy Bishop Airport, home base and largest hub for this regional carrier.
Also, in this week WestJet CEO Gregg Saretski commented that the CSeries was “too small” for the airline, and “too big” for its regional operator Encore.
A recent tour of the CSeries to the United States has spurred rumors in the industry about a potential order from United and Delta Air Lines. In the case of United, the airline has signaled that it could place an order for up to 50 CS100s, while Delta Air Lines CEO Richard Anderson commented that the Atlanta-based carrier is “taking a very serious look” at purchasing the aircraft.
For Bombardier, the order represents a major victory for the CSeries program, marred with financial problems. Last October, the Government of Québec announced a US$1 billion investment in the program, plagued by ever-increasing cost-overruns and a schedule running two years behind the Entry Into Service (EIS). According to Bellemare, the order “will be the catalyst for future orders in North America and around the world.”