CSeries order will firm up in ‘weeks’
Air Canada urges Ottawa to ‘step up’
TORONTO Air Canada will decide on its CSeries order within “weeks,” but some level of government funding will still be necessary to help Bombardier Inc. succeed, the airline’s chief executive said Monday.
“It’s coming together pretty quickly now,” Air Canada CEO Calin Rovinescu told reporters when asked how soon the airline will turn its letter of intent into a firm order.
“We’re looking at a fairly short time frame, like in the next weeks. It’s not going to be a long drawnout affair.”
Once this happens, Air Canada will become the first firm CSeries customer Bombardier has snagged since September 2014. The deal, which is for 45 of the larger CS300 aircraft, will bring the total number of firm orders for the CSeries to 288.
Air Canada’s order is worth US$3.8 billion at list prices, although it has been reported that the airline received a significant discount.
It is Bombardier’s first CSeries order from a major North American airline, and also includes an option for 30 more aircraft.
In a speech to the Empire Club of Canada on Monday, Rovinescu said Air Canada’s support of the CSeries “sends an important signal to the market that should give other airlines the confidence to purchase this extremely efficient next-generation aircraft.”
But he also said the federal government needs to “step up” and accommodate Bombardier’s request for US$1 billion in financial aid.
“For important global champions (like Bombardier) to succeed, they do require some level of support from government,” Rovinescu told reporters after his speech.
Navdeep Bains, federal minister of innovation, science and economic development, said last week that the government is still conducting its “due diligence” on the request. Bombardier wants Ottawa to match the US$1 billion it received from Quebec in October.
Rovinescu also weighed in on Alaska Air Group Inc.’s US$2.6-billion deal to buy Virgin America Inc.
The U.S. airline industry has undergone a wave of consolidation. Rovinescu said the deal, announced Monday, indicates smaller players want in on the action too.
“It doesn’t change the landscape dramatically, but generally speaking consolidation has been healthy for the industry. Companies are much healthier than they were a decade ago,” he said.