Even though the CSeries jet remains grounded after an engine fire and unable to attend the Farnborough International Air Show in England, Bombardier Aerospace has kicked off the week with 48 new tentative orders.
On Monday, Bombardier announced a letter of intent signed with Zhejiang Loong Airline Co, a domestic Chinese upstart airline based in Hangzhou, for 20 CS100 airliners. Based on the list price, a firm order would be valued at about $1.28 billion (U.S.)
As well, Petra Airlines of Amman, Jordan has signed a letter of intent to acquire up to two CS100 planes and two CS300 airliners, the larger version that can seat up to 160 passengers. If the agreement were fully converted, the order would be worth almost $300 million (U.S.).
That comes on the heels of an announcement on the weekend that Falko Regional Aircraft, a U.K. based lessor, has signed two letters of intent to purchase up to 24 CS100 planes.
While these are only possible orders, the announcements are seen as momentum for the company, which has struggled to bring its all-new plane to market, with repeated delays and setbacks.
Bombardier is pinning its future on the CSeries—as it tries to break into the bigger jet market and compete with Boeing and Airbus, which have been racking up billions in orders.
At last summer’s Paris Air Show, which like Farnborough, is where aerospace manufacturers showcase their products and hope to nail down sales. Bombardier left without any CSeries orders while rivals announced deal after deal including Brazil’s Embraer, which launched plans for a revamped of its regional jet and immediately recorded 365 orders.
Embraer won a 50 regional jet order on Monday at Farnborough, worth $2.2 billion (U.S.), to Trans States Airlines, the parent company of U.S. carriers Compass Airlines and GoJet Airlines.
Despite the sluggish CSeries sales, Bombardier officials have insisted they are on track to their goal of getting 300 firm orders by the time the CSeries enters service, which is now expected in the second half of 2015.
They say that target remains unchanged despite a May 29 engine fire on a test plane at Bombardier’s production facility at Mirabel airport during a routine ground test. Bombardier says the test planes are expected to resume flight in the coming weeks.
Over the weekend, executives at Pratt and Whitney, which makes the geared-turbo fan engine for the CSeries, said a seal in the oil system was to blame for the engine incident, and not a problem with the fuel-efficient engine.
“We think the market is really accepting the technology,” said Pratt and Whitney president David Adams told Bloomberg.
“We’re not seeing any reluctance to buy the GTF based on the CSeries incident. We’re very confident with the reliability of the product and this is the type of thing that happens when engines have 10,000 hours of operation.”
Bombardier also disclosed that airBaltic, a Latvian airline, was the previously announced customer that had converted three option aircraft to firm orders in February.
As well, Falcon Aviation Services of Abu Dhabi has signed a firm purchase agreement for two CS300 jetliners, converting a letter of intent, for one aircraft and one option.
Analysts view Bombardier’s announcements as a good step forward, though commitments are not firm orders. Firm orders now stand at 203.
“Total orders and commitments are now at 495 units (from 447 on Friday), with what we see as a real possibility that 100-plus commitments could be converted,” said RBC Capital Markets analyst Walter Spracklin in a note.
“Accordingly, management’s stated goal of 300 firm orders by entry-into-service seems achievable at this point. Additionally, the recent engine issue does not appear to be a significant hurdle for potential new CSeries orders,” Spracklin said.
Benoit Poirier, an analyst with Desjardins Securities, noted that these latest commitments are the first for the CSeries program since the Singapore Airshow in February.
“As a result, we believe these orders should quiet some concerns in the marketplace about the strength of the CSeries program, which was also impacted by the engine-related incident,” Poirier said.
Spracklin cautioned though that question still remains about the market potential of the CSeries.
“The clean-sheet design and market leading efficiency of the CSeries should stimulate new demand, but no question, the size of the market for the CSeries remains a question,” Spracklin said
- With files from the Star’s wire services