Former CSeries set for sales liftoff

Potential seen for A220 sales at Farnborough

TORONTO Last year, Bombardier Inc. walked away from the commercial airline manufacturing industry’s marquee air show without a single sale of its signature CSeries aircraft.

This year, however, prospects for the plane — rebranded as the A220 following the recent close of Airbus SE’s surprise deal to take control of the program — appear to be looking up.

With the weight of the Airbus sales and marketing team and its deep customer support expertise behind the A220, analysts across the board see potential for more orders at the Farnborough Air Show, which begins next week.

A new order announced this week for 60 A220 aircraft from U.S. low-cost carrier JetBlue Airways Corp. only bolsters those prospects, said Robert Kokonis, president of aviation consulting firm AirTrav Inc. “Having a marquee client like JetBlue — no different from when Delta and Air Canada put their orders in — is huge because it’s an established, leading low-cost carrier. This is big news,” Kokonis said. “I suspect if there’s any customer that’s been thinking about ordering it, they are going to do it in Farnborough.”

Last year at the Paris Air Show, which alternates years with Farnborough, Montreal-based Bombardier’s biggest win was an order for up to 50 Q400 aircraft from India’s Spicejet, one that boosted the stability of that program, but did nothing to instil confidence in the CSeries. The lack of sales, combined with a trade dispute with the Boeing Co. that was just gearing up, even put the future of the CSeries program in doubt.

Credit Suisse analyst Robert Spingarn wrote in a note to clients that he expects the A220 to take centre stage at Farnborough. This year’s event, he wrote, “could be an attractive entry point for airlines that have lingered on the sidelines, given greater clarity on the future of the program.”

Goldman Sachs analyst Noah Poponak said the JetBlue sale was a positive for Bombardier, and expects it to be the first of many new orders for the program under Airbus’s ownership. “The order announcement comes in the second week following Airbus taking ownership of the program, which reinforces our view that the partnership will contribute to the long-term success potential of the program,” he wrote in a note to clients this week.

Airbus officially took the reigns of the previously beleaguered CSeries Aircraft Limited Partnership (CSALP) on July 1, nine months after the blockbuster joint venture was first announced. The partnership between the two aerospace manufacturers was touted as providing much-needed stability for Bombardier, even though it gives the company a smaller stake in the program.

Richard Aboulafia, an aviation analyst and vice-president at Teal Group, cites the Airbus partnership as one factor that secured the JetBlue order. “The things that were holding JetBlue up were concerns about an orphaned product, product support and things like that,” he said. “I think this is as close as you’ll get to proof that the Airbus brand and reassurance is going to mean a lot for this program.”

He also expects more orders to follow. At the same time, he said the Farnborough Air Show would provide Bombardier with an opportunity to show its commitments to the remaining products within its commercial aircraft division — the CRJ and Q400. The CRJ in particular, says Aboulafia, is in need of a revamp. He also said that Bombardier’s recent decision to sell off its Downsview site, where the Q400 is assembled, potentially raises questions about whether the company is looking to secure larger order volumes.