MIAMI — Bombardier’s CSeries CS100 and CS300 made their debuts at last month’s Paris Air Show, where the manufacturer and Swiss International Airlines announced that at least 10 of the carrier’s 30 orders will be of the larger –300 variant. But a new report from Airinsight raises a number of post-Paris questions focused on where Bombardier should see sales for its C Series.

(Credits: AirInsight)

At the show, Bombardier released its 20-year market forecast, where it said the commercial aircraft market is profitable and predicted significant growth ahead, fueled by replacement demand in established markets such as Europe and North America, combined with the growth in others such as China and South Asia. It forecast a demand for 12,700 60- to 150-seat aircraft, 5,700 60- to 100-seat aircraft and predicted that the 100- to 150-seat segment will witness a major fleet transformation as new clean-sheet aircraft designs enter into service. The Bombardier order book stands at 603 CSeries aircraft, including 243 firm orders.

The OEM says it is exploring a number of leads. Who are they and where are these opportunities? “We don’t have any inside information on this. But looking at what the market, here is our best guess about where the opportunities are and who the targets are,” said the report.

Airinsight’s analysis focused on passenger aircraft that are “natural” targets: BAe 146/RJ, Airbus A318 and A319, Fokker 70 and 100, Douglas DC-9 & MD-80 and Boeing 737-500 and -600. “Going through global fleet data we come up with the following charts. We excluded the parked aircraft from our market estimate. Together these two seat categories represent 2,466 active aircraft in passenger service,” it said.

Clearly Bombardier will not win every campaign, with Embraer fighting them tooth and nail for every sale, said the report. “We do not see either Airbus or Boeing seriously competing in this range, with only a handful of orders for A319neo and 737MAX7,” it said. “There are some industry analysts who doubt that those aircraft will be built, with the OEMs moving existing customers to larger models.”

In looking at the replacement opportunity, where are these aircraft located? The answer might provide a guide to how the campaigns could play out.   To try answer these questions, Airinsight categorized its data to only look at active aircraft at the end of the first quarter of 2015, and then segmented the fleets into those in the 100-110 seat- (CS100) and then 111-150 (CS300) seat-categories. Note the airlines listed do not necessarily include the fleets at feeder or allied airlines. Because of the MRO impacts, those fleets might or might not influence decisions at the mainline carrier.

Bombardier_BD-500-1A11_CSeries_CS300_on_finals_after_its_first_flight (1)
(Credits: Gilbert Hechema)

Where are the operators?

As Bombardier has stated, they are all over the world, said the report.   “Many are large but many more have smaller fleets. This suits Bombardier’s current strategy,” it noted. “But they have lost two years of advantage and this has kept many possible customers to hold back when they might have stepped up with orders.”

For the CS100, key targets are Avianca, SAS and Air France, marquee brands where success will encourage others to follow, said Airinsight. “But the TACA part of Avianca-TACA is an Airbus stronghold, and their Aeroman maintenance shop in El Salvador is fully certified and handles Airbus maintenance for United Airlines and others on an outsourced basis,” it said. “It would be a difficult conversion from Airbus; moreover we suspect that a refresh is geographically and culturally Embraer’s to lose.”

SAS is possible, but likely to be acquired by Lufthansa Group in the future, said the report. “Which means a refresh decision comes from Frankfurt.  AirFrance-KLM is in a politically difficult position with Airbus, and while they need to replace A318s with something more efficient, they are French airplanes and a choice may be slowed,” it said.

Airinsight noted that CS300 key customers are Delta and American. “After this comes the various Lufthansa family carriers. Swiss has already stepped up and barring any fumbles or problems, could put Bombardier into a good position,” said the report. “The big U.S. carriers will be a challenge – especially Delta because it likes cheap aircraft and will likely continue to seek out low capital cost options rather than consider the CS300.  American has started to renew its fleet and seems focused on Airbus and Boeing.”

(Credits: Bombardier)
(Credits: Bombardier)

Delta likes them old and cheap – Bombardier should have won there already but pricing snafus meant losing to the 717s that AirTran was getting rid of when it merged with Southwest. Delta has now taken E-190s (ex Air Canada) so that Embraer has an advantage going forward.