Who's In Third? Bombardier's Struggles Leave Door Open For Embraer.
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Bombardier could use some good press. The struggling Canadian airplane manufacturer has had a couple of major setbacks in recent months. The company had hoped that its fuel efficient CSeries planes would gain traction amongst major airlines as they looked for alternatives to short-range jets made by Boeing and Airbus. However, after some initial interest, new orders for the Bombardier CS100 and CS300 have dried up.
Too much competition?
The CSeries was certified by Transport Canada in December 2015, two years after it took its first flight. Thus far, however, interest has been limited. The 110-seat CS100 and 135-seat CS300 have, together, received a total of 243 orders from the likes of Lufthansa, Republic Airways and Swiss Air. Except for regional Malaysian airline flymojo, which only started service in October of last year, the CSeries has not received any firm orders since the summer of 2014. United Airlines has opted for new Boeing 737s instead of choosing to fill out its fleet with Bombardier’s short-haul options, and it looks like Delta is leaning in the same direction.
The Big Two can often offer package deals, giving airlines significant discounts for large orders. Also, having similar models in a fleet means that pilots and maintenance people will be more familiar with a type of aircraft and will not have to undergo new certification in order to work on a new model. Southwest, for example, only uses Boeing 737s, meaning its personnel are more or less interchangeable with its airplanes.
The other major second-tier airplane builder, Brazil’s Embraer, has gotten slightly higher interest from its new E-Jet E2 family of aircrafts, which are more-fuel efficient versions of models that are already in operation. There are 325 firm orders for the new models, which should be ready to take to the skies in 2018.
Long-range business jets
Luckily, one of Bombardier’s most profitable divisions is its long-range business jet unit. This has been the case since 1990, when the Montreal-based company took over American firm Learjet. Bombardier’s new long-range business jets, the Global 7000 and Global 8000, were in development at the same time as the CSeries. These new models are based on the popular Global 5000 and 6000, which have the range to fly between continents. The newer incarnations will have an even more impressive range, while also offering greater fuel efficiency.
It is not all good in the business jet division, however. The announcement that the development of these new corporate jets was being delayed until 2018/2019 caused Bombardier’s shares to fall to their lowest point in over two decades and forced a number of layoffs in the business jet unit.
Even with the delay, the new planes, especially the Global 8000, will be buzzworthy. The 8000 has a range of 7,900 nmi, which is more than any other business jet currently in operation. It will be able to fly between New York and Mumbai or Sydney and Los Angeles nonstop without refueling. The new timeline for development puts the release date sometime during 2019.
Embraer has banner year
Bombardier’s biggest rival, meanwhile, has announced that 2015 was its best year in half a decade. Embraer delivered 221 jets last year, and its recent performance puts it in a solid third place behind Airbus and Boeing. The Brazilian manufacturer has made inroads in up-and-coming markets and niches. Its smaller jets are used in the UAE and China, and Iranian airlines have expressed interest in short-range commercial planes.
Bombardier also recently made a pitch to Iran Airlines, though the flag carrier, in the market for new planes since sanctions were lifted, has said that it is leaning towards Boeing and Airbus.
Bombardier faces an uphill battle going forward. It can only hope that it can find some niches for its CSeries and that its Global 7000 and 8000 can outshine the competition if and when they finally get in the air.
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