Leeham News and Analysis
There's more to real news than a news release.
Leeham News and Analysis
- Bjorn’s Corner: New engine development. Part 4. Propulsive efficiency April 19, 2024
- Boeing unlikely to meet FAA’s 90-day deadline for new safety program April 18, 2024
- Focus on quality not slowing innovation, says GKN April 18, 2024
- Boeing defends 787, 777 against whistleblower charges April 17, 2024
- Dissecting Boeing CEO’s statement next new airplane will cost $50bn April 15, 2024
Odds and Ends: Attempts to bring Boeing, IAM together; Bombardier changes gears;
Boeing/IAM attempts: Efforts are underway to bring Boeing and IAM 751 back to the table, reports The Everett Herald. The news is not unexpected; we wrote upon the IAM’s rejection of the Boeing contract offer in connection with the 777X site location that efforts were sure to come. The Herald reports who is trying to bring the parties back to the table, and has some details about the attempt.
But as yet, Boeing is not coming back, although 751 leaders are willing to return, The Herald reports. Notably in the article, Alex Pietsch, director of Washington State’s aerospace department, is “not optimistic,” but only “hopeful.”
Efforts by other states to win Boeing’s business are accelerating. Bloomberg neatly summarizes this part of the story.
Bombardier changes gears: Bombardier changed gears yesterday when it pushed Chet Fuller out as head of sales for CSeries and replaced him with the head of its business aircraft division. The Montreal Gazette has a series of reactions to the move.
Meanwhile, a conditional order for up to 30 CS100s may be in jeopardy. The Toronto City Council appears ready to reject a request for an early decision on whether to extend the runway at the downtown Billy Bishop Airport and alter restrictions to commercial jet traffic, reports the Toronto Globe and Mail. Porter Airlines, the dominate carrier at the airport, made the request and placed the order, conditional on Toronto and the federal government agreeing to changes at the airport and its regulatory controls.
Aviation Week reports on why CSeries has flown fewer flights than other test programs, as well as the timing to reevaluate the entry-into-service.
In the last three years whenever Chet Fuller was commenting on the CSeries everything about this aircraft was said to be “phenomenal”. Everything except the sales figures I might add. There is no need to look anywhere else to find a reason for his dismissal.
It is the second big head to roll at Bombardier in the last two months. Last October Ben Boehm left Bombardier under unexplained circumstances. Boehm played a key role alongside Gary Scott early in the development phase of the CSeries. A few weeks after his unexpected departure Bombardier announced an important reorganization in its Aerospace division. Steve Ridolfi was replaced by Éric Martel as President of Business Aircraft and Ridolfi was put in charge of strategy, acquisition and mergers for the entire group. I can only speculate that this reorganization had been planned for sometime and that Boehm did not like the role he was going to play in it, so he left to become COO of Cascade Aerospace.
In the case of Chet Fuller it appears he did not have time to find himself another job. But considering his qualifications that should not take him too much time. But it must be very frustrating for him because the CSeries programme is very close to reaching all its goals. Indeed the next twelve months promise to be very exiting, with seven aircraft gradually entering flight testing, a likely appearance of the CS100 at the Farnborough Air Show and potential new orders from several mainline operators.
But the problem Fuller had is that the CSeries was not the only aircraft in his stable that was under performing. The other two major programmes, the CRJ and the Q400, did not generate the sales that were expected of them. The recent sales ratio of the CRJ versus the E-Jet, and Q400 versus ATR, reminds me of the US kill ratio in the Korean war! So Bombardier decided it was time to do something. Chet Fuller had to go because he was not delivering what was expected of him. But we won’t find out if it was a good decision when the CSeries starts to sell in great numbers because that was to be expected anyway. We will only find out if and when the CRJ and Q400 start to attract more customers, because that is a much more difficult task!
Note: There are interesting comments in the Wall Street Journal about the possible reasons why Chet Fuller was replaced:
http://online.wsj.com/news/articles/SB10001424052702303670804579236183977887594
It seems the Iraq deal is firm now. http://ca.reuters.com/article/businessNews/idCABRE9B30LW20131204
IMO Bombardier should have been more aggressive in sales instead of conservative. Conservative can be risky & expensive too.
It takes a lot of nerves to resist the temptation to lower to prices in order to garner more sales. I believe it would not be in Bombardier’s interest to offer deep discounts at this stage. By selling the airplanes at a reasonable price BBD will be able to maintain a descent cash flow in the first few years and make the programme quickly profitable. But in order to achieve that goal you must have a lot of confidence in your product. Bombardier knows that it came up with a fantastic new plane which is extremely competitive. It is fuel efficient, environmentally friendly, comfortable for the passengers and easy to maintain. It’s like holding four aces in your hand. The question is who is going to blink first.
I think they lost a few customers to the A319 NEO / Embraer E2’s
I think Airbus and Embraer also lost a few customers to Bombardier’s CSeries. Sixteen customers, for 182 orders and 419 commitments, so far. The E2 will offer stiff competition at the lower end, but the 319neo is a stillborn in the upper segment. And the CS500 will give the 320neo a good run for its money.