Analyst: Airbus could eventually terminate CSeries program

Nov. 7, 2017, © Leeham Co.: The Bombardier CSeries may go the way of the McDonnell Douglas MD-95, a Wall Street aerospace analyst suggests: that is, the program is likely to remain unprofitable and be shut down.

Doug Harned, the analyst for Bernstein Research, draws a parallel between Airbus’ acquisition of a majority stake in the CSeries program and Boeing’s 1997 acquisition of McDonnell Douglas in which the MD-95 joined the Boeing family of airplanes.

The 110-seat MD-95 was renamed the Boeing 717. Boeing attempted to market the airplane, without success. Production was terminated after 156 airplanes were built.

Good airplane, no future

Harned acknowledged the 717 was a good aircraft. It remains in high demand on the used aircraft market. But it was an orphan—just one model was produced—and had no commonality with the larger Boeing 737 family.

Boeing was unable to reduce costs because suppliers, facing a low-production future, were unwilling to cut costs, Harned said.

He believes Airbus faces similar challenges with the CSeries.

Likely to remain unprofitable

Harned believes the CSeries, although in two models vs the one for the 717, will remain unprofitable, eventually leading to a decision by Airbus to shut the program down. (It should be noted that Bombardier has the right to repurchase Airbus’ shares.)

He believes that like Boeing, Airbus won’t be able to cut costs because suppliers already see a difficult path to profits.

Harned believes the CSeries needs to sell for about $30m to be profitable. Airlines want prices in the low $20m range, he said.

Harned also cast doubt on the current skyline quality (something LNC has noted many times), with the prospect of cancellations.

An unidentified European customer last week signed an LOI for 31 firm and 30 option CSeries. This contract is to be firmed up by year-end, Bombardier said.

Eliminating a competitor

Harned sees the Airbus deal as a mechanism to eliminate a competitor and benefit from learning from the advanced technology in the airplane. But even at a $30m sales prices, this will account for only about 2% of sales, he projects, an inconsequential revenue producer for Airbus.

The market demand is a matter of debate.

Bombardier forecasts a demand of 6,800 aircraft in the 100-150 seat sector the CSeries serves. In 2014, the last year Airbus identified the demand for this sector in its 20-year forecast, Airbus projected a demand of just over 4,100 aircraft.

Boeing hasn’t publicly projected a demand in the 100-150 seat sector, but in a research note issued today by Cowen & Co., Cai von Rumohr cites a Boeing forecast of 3,000-4,500.

The Airbus-Bombardier deal is expected to close in 2H2018. Airbus plans to assemble the airplane in Mobile (AL), supplementing the current Montreal assembly line.

162 Comments on “Analyst: Airbus could eventually terminate CSeries program

  1. Well it is certainly possible but at the same stage I reckon times are fundamentally different than back in 2005. In simple terms the massive backlog of orders for narrow bodies means that Airbus can add to their market share in a relatively painless manner without cannibalising orders of the A320. Given they have already sold out the A320 into the foreseeable future any additional sale of C100/300 should have a positive impact on the fortunes of Airbus group once they have travelled down the learning curve. It also puts massive pressure on Boeing because they can deliver more aircraft and fight the MAX on two fronts. Strategically Airbus are walking into this with their eyes open whereas the B717 was the orphan product of a merger that happened for very different reasons

    • Apples and Sour Grapes in my opinion and totally out of context.

      The 717 (MD) was inherited as part of a larger take over of Boeing by MD (grin) . It was never remotely the focus of the deal.

      The 717 was an old design that while pretty decent, had no future upside.

      The market and the situation has changed and the C Series is a product that can support the use of main fleet pilots and still make a profit.

      The 717 continues to work because it was dead cheap. But even that is going away as the main factor.

      I don’t buy that Airbus will put the time and effort in this to try to reap some technology that if and when they do an all new is dated and very specific to that aircraft size.

      It creates a whole new world at the bottom particularly with the C300 and C500.

      At no cost they have replaced all the aircraft from the now dated A320 down.

  2. I am no analyst or have any in depth knowledge but see the CS series as AB’s 100 – 160 (CS1/3/5) seat aircraft family, the 320(+)/1/2 the 160 -220 seat single aisles.

    In a simplistic manner, there are around 6200 A319/320CEO’s delivered ordered, if the CS3/5’s pick-up 50% of these replacements its more than a worth while investment for AB.

    Airlines will be able to buy all their single aisle aircraft requirements from 100-220 seats from one supplier. As time moves on commonalities between types will increase such as slowly happening with the 330NEO/350.

    • There won’t be communalities…..

      this is done during design and development, you can’t get A320 and CS on the same type rating.

      • What I had in my mind is that an 32NSA and CS could have lots in common like possible common type rating or short transition between types.

        Like the position of the indicators on a German an Japanese vehicle.

  3. Of course the difference being the MD95 (B717) was an updated DC-9, mostly designed 35 years earlier in the early 1960’s only updated with new engines and a glass cockpit. Also, this was at a time when the first regional jets appeared on the market encroaching on the 100 passenger jet operations. He may be right, but I think he’s wrong. The Bomber already has 3 times the amount of sales for this gas sipping, less polluting, quieter more spacious airplane. The Airbus deal may not hold, but somebody will probably keep making the CSeries…

    • @sam:
      “Of course the difference being the MD95 (B717) was an updated DC-9.”
      Agree. 717 history is not really a good parallel to predict CSeries fate.

      Diff in product life cycle aspect:
      717/M95 was really a derivative of a family(M90) derived from another family(M80) derived fm the original family(DC9). When 717 debuted in 1999, there was simply not much development /tech upgrade mileage left on its DC9 platform which was loaded with structural dead weight related to legacy design ‘baggages'(e.g. aft staircase and its access way/storage compartment) no longer needed in the 21st century and even the 737 Original in 1968 didn’t carried. In contrast, the CSeries today is a brand new, clean sheet design with lots of development upgrade potentials not yet utilized and free fm any unnecessary structural dead weights. CSeries today is @ the same product life cycle stage as the DC9 was in 1965, 737 was in 1968 and 320 was in 1988.

      Diff in product strategy aspect:
      Closest Boeing equivalent to 717 in size @ the time was the 736. It was apparent Boeing preferred to sell 736, mostly due to NG family design
      investment amortization(e.g. the family received a brand new wing set still being used on Max family today) & production commonality, rather than 717. In contrast, Airbus today has made it clear that 319Neo will be a sunset product(I was surprised due to commonality with Neo family) mostly likely to be replaced by the same size CS3 in Airbus narrowbody portfolio.

      Diff investment intentions:
      Boeing acquired MD mostly for the main course of Defense+Space biz and their mkt valuation. M95 came along as just a snack/dessert which I suspect valuation was nearly zero for Boeing. It’s easy to imagine if MD was selling only the M95 program to Boeing, they would hv told MD to get lost. In contrast, valuation of CSeries investment by Airbus is likely higher(even though they pay zero cash for it) but most importantly, Airbus is not really buying a corp unlike Boeing was. They are buying a civil program….the intent is clear.

      “I think he’s wrong.”
      Agree per reasons stated above.

      ” The Airbus deal may not hold”
      I think Airbus will hold on to CSeries. There’re just too much key new tech in that thing even Airbus(and Boeing) is not producing for the narrowbody mkt. This will be especially true if Airbus will do something drastic such as re-position the 320 family with the 321(about 200 seats 2-class) as its epic center/design baseline for the whole family with the hypothetical 322 @ the top and the 320 @ the bottom….wide open mkt space for the CS1/3 to fill below 320.

      • Airbus might want to make the C-series and a 2025 A320-321-322 update/launch with common systems so Airlines get into the Airbus cockpit and systems filosophy right at the CS-100 size and then never leave. That means moving to Active sidesticks making pilots only one way transferrable and makbe move the Airbus narrowbody wing manufacture fom England to N. Ireland leaving the widebody wings in England/Wales, thus making wings everywhere in the UK except Scotland..

        • Pilots have transient from aircraft to aircraft successfully since the Wright brothers .

          While this may work its way into the Airbus lineup with an all new aircraft , I don’t see them spending the big bucks to do a change.

    • If Airbus hadn’t dived in, most likely the Chinese would have, eventually.

      Looked at in one way, Boeing has had a lucky escape; it wasn’t the Chinese who acquired the C Series. If they had, Boeing would have soon been finding itself contending with a large East Asian competitor able to pass western certification, with the backing of Chinese diplomatic clout to dominate sales in the entire region. Au revoir Boeing’s sales in East Asia.

      Boeing’s and their investors’ ability to see the long term big picture is questionable. Maybe they should play more chess. Airbus has just said “check, your move” just after Boeing thought they’d made a good move on a completely different board.

      • Hmmm, I seem to be missing something.

        The C series already has certification .

        Anything new has to be re-certified and that all depends on the process.

        You can’t just move the whole thing to China and get it automatically.

        • Sure, but if a Chinese company had acquired Bombardier lock stock and barrel, they’d then have gotten their hands on the staff who know how to take aircraft through certification. The Chinese can be very good at learning from things, people, information they acquire. It would have short circuited an effort to take a Chinese design through a western certification process, possibly using Bombardier as s proxy, bringing it to market sooner.

          Now that Bombardier is doing a deal with Airbus, a Chinese company would have to learn how to certify an aircraft to Western standards all by themselves. That will take longer. So they won’t be competeting with Boeing yet.

          One other aspect is manning levels in the FAA. I gather that these days the FAA (to some extent) relies on the manufactures self-certifying. That probably means there’s fewer people in the FAA than in the past.

          So if a new Chinese manufacturer comes along needing the FAA to be more involved in a certification campaign, it might be quite a slow process.

          That’s pure guesswork on my part. Possibly complete rubbish…

    • Absolutely on point – the 717 was a shrunken MD-90 with new, but not really modern engines. Its empty weight alone makes it non-competitive with a new technology, clean sheet design like the C Series.

      • The 717-200 OEW is ~31T, that of an CS100 around 35T.

        Biggest problem most likely engines, the 717’s RB715’s fan diameter is 58″ (LEAP1B=69″), PW15(9)00’s =73″).

        All new engines have larger fans, not sure what size (weight) fanned engines could be reared mounted on 717/MD90 like aircraft.

  4. The Cseries is better looked at as the DC-9 at its start. The program sold 2439 planes in total over its life (dc-9, md-80/90 and 717) the Cseries is not a warmed over ancient beast as the 717 was at the time. Asking for a plane like this at 20m is idiotic. Also the Embrear E-190 has sold almost 600 units. So I am saying this is a pretty silly prediction. If Airbus tries to shut it down the GOC will nationalize it and sell it back to BBD I suspect. That is why CSALP is HQed in Canada as a condition and I think Airbus knows this.

  5. “Harned sees the Airbus deal as a mechanism to eliminate a competitor and benefit from learning from the advanced technology in the airplane.”

    I think Doug knows well this 717 comparison is non-sense. He must have different intentions here.

    Airbus took the CSeries to have their British, German and French engineers & R&D institutions learn the advanced technology from their Canadian colleagues. After just having recently put into service the all composite A350XWB, all new A400M and A380.. seriously?

    • This is now a dumb comparison, but the MD’s and 717’s had rear mounted engines, quite different characteristics than the 737’s.

      If the CRJ’s was part of the AB deal I would say good chance they being dropped.

      End of the day there could be many airlines that could do well operating a simplistic fleet of CS300’s and 321’s.

    • Different (mind) set of engineers. There is synergy in that.

      Is Canada “European” enough to allow induction of CSALP as a new but productive family member?

      • When Boeing reach the point of building an NSA it will have to be from 130-220 seats, can you do that with one engine type and wing to cover various ranges?

        AB has its 100-160 seat wing and engines in the CS, their NSA will only have to address the 160-220 seat market. They could really optimize this aircraft while the Boeing NSA will have to make compromises in many respects.

        • You’re effectively saying that the bar is being raised, and if Boeing are to leap it with a single design it’ll have to be something mighty impressive. I quite agree. If Airbus do a highly optimised A321 replacement in CF, which they might, Boeing may struggle to equal that never mind beat it.

          • Keesje:

            What advanced technology does BBD have that Airbus does not?

            Are you saying the A350 is not advanced?

            The C series has a good wing, Airbus makes good wings.

            The rest is well executed system but nothing new, just very well done.

      • The A400 is a good example of how not to do things (the 787 was in that same category, nothing wrong with the tech, stupid decision my management )

        The A350 is mostly composite, section 42 is not.

        • @TransWorld

          I’d assume that you meant Section-11.

          Airbus fuselage Sections: 11 -19
          Boeing fuselage Sections: 41 – 49

          On the A350 nose fuselage section (Section 11/12 ), Section-11 is made of aluminium. Three composite panels cover Section 12 (nose upper shell extending aft from above the cockpit windows; left- and right-hand side panels including the respective passenger door apertures) and a single composite panel that covers the lower nose fuselage of Section 11 and part of the lower nose fuselage of Section 12.


  6. A company does not acquire a competitor for $ 1.00 to make it great and successful!
    It’s not genius, just good common sense.

    • “just good common sense”

      That is probably one of these “duh, simple, obvious … but false” thingies?

      • Many years ago, the ATR/Alenia Group came super close to buying de Havilland Aircraft in Canada….it was not for the glorious Dash 8 product line but to simply acquire the balance of the market. The Dash 8 product line would have been terminated and the Q400 would never have been launched…..

        • That assumes the authorities would have allowed it and they would not have.

          Would haves vs what is.

    • @Fern:
      “A company does not acquire a competitor for $ 1.00 to make it great and successful!”
      It might not be “$ 1.00” but Airbus also “acquired” a competing 320 production line in China for very little $ thru its JV with “competitor” Comac to establish Airbus Tianjin. Comac along with their local gov’t partners provide most of the upfront infrastructure costs such as land, buildings, generic manufacturing support equipment, etc.

      I don’t see Airbus want anything fm Airbus Tianjin except “to make it great and successful!!”….particularly in regards to smooth ‘selling’ in China(but some outputs are actually sold outside China as well.). In a nutshell for the Airbus Tianjin JV: Airbus got the product+know how, Chinese partners provide the industrialization. The Airbus goal is to widen 320 production footprint globally(Boeing has an opposite strategy to centralize 737 production @ Renton).

      The arrangement is in reverse for Airbus in the CSeries JV: BBD got the product+know how, Airbus provide the industrialization @ Alabama. The Airbus goal this time is to widen product portfolio across the narrowbody mkt space(Boeing also has an opposite strategy to concentrate on a single family+a single engine design).

  7. Boeing bought MDD lured by its huge defense business and had no interest in keeping the latter’s commercial side going (with a mere 4% market share at that time). MDD did not have a seamless line of jetliners, just the -90 and -11 but nothing in between. At a time when both Airbus and Boeing were selling the concept of airplane families, MDD had nothing serious to compete in that header. Besides, the 717 was a good contender to the 736, so closing the former’s assembly line was good business for Seattle (Embraer would later jump in to the leap and take the 736/A318 size bracket by assault. So, in Boeing’s view, and even though VP Harry Stonecipher was a former MDD VIP, killing the 717 altogether was a logical decision. In the case of the Airbus-Bombardier tie-up, it appears Airbus is more interested in pushing ahead with the CSeries. It helps Toulouse rejuvenate its product at the bottom of its aircraft family at practically no cost. One day soon it could provide the basis for the launch of a new product in the middle and upper size brackets of its A320 Family.

    • There was a Boeing urge to kill unionized Long Beach as well. Otherwise the new 787 assemly line would have opened quickly in Long Beach as during WWII when Douglas produced the best B-17’s in Long Beach. Douglas had mainly a wing design issue to be competetive for a long time before aircraft quality and reliability became lower than Boeing 737-300 and A320’s and they had to sell their Aircrafts at a loss. The sad story is that the 717 fixed all problems besides a poor wing design that should have been of GV Technology but was not.

      • The transaction took place long before the 787.

        MD just traded one union work force for another when they bought Boeing.

        717 was below the 737, Boeing did keep it going until order petered out.

        Different time, and as was pointed out, the numbers are now a lot different for market size.

  8. With all due respect to Mr. Harned, but it would seem as if he can’t see the forest for the trees.

    Harned sees the Airbus deal as a mechanism to eliminate a competitor and benefit from learning from the advanced technology in the airplane. But even at a $30m sales prices, this will account for only about 2% of sales, he projects, an inconsequential revenue producer for Airbus

    Mr. Harned’s analysis is really a case study into American-centric quarterly-type capitalism where short term-thinking trumps long-term thinking.

    As a contrast, may I suggest this opinion piece in AW&ST (subscription required):

    In a year full of surprises, the biggest so far is Airbus’s move to become a majority owner of Bombardier’s C Series program. The high-level implications of this deal, should it be approved by regulators, are well known, but there are several less obvious implications. In contrast to Boeing’s “U.S.-first” approach, Airbus is doubling down on a globalist strategy by bringing Canada into its ecosystem.

    In short, acquiring the CSeries is a major strategic move by Airbus. Canada will become Airbus’ 7th “home country” — a move that also opens up huge opportunities in the defence sector. Also, why would Airbus want to throw away all those possibilities?

    Fact 1:

    Partly thanks to the Airbus-invented production system where fully integrated aircraft sub-assemblies are shipped to final assembly lines (FALs) — and where the FAL only accounts for some 6-7 percent of the value chain — it’s much easier for Airbus to set up FALs elsewhwere than it is for Boeing.

    Boeing, of course, tried to copy the concept only with the 787 — seemingly with various degrees of success — while all other OEMs seem to more or less be copying the Airbus manufacturing set-up.

    The CSeries is thus manufactured in a way much similar to how an Airbus is put together, than what’s the case for a Boeing aircraft.

    With the CSeries soon under Airbus control, I would not only expect an additional FAL being built in Mobile but also a third FAL coming online in Tianjin, China by the mid 2020s.


    Even if Mr. Harned should be proven right that the current suppliers on the CS100 and CS300 would be unwilling to cut costs, seemingly due to a low-production future worst-case scenario, he has not taken into account that with a CS500 launch Airbus/Bombardier would be able to bring new tier-1/-2 suppliers onboard. I would presume that all currently written contracts only include the CS100 and CS300.

    With new tier-1/-2 suppliers offering dual sourced competing aerostructures, systems etc., the current suppliers would essentially be forced out of the current programme.

    Fact 3:

    McDonnel Douglas never developed an all new wing after the DC-10. Hence, Boeing acquired the MD-95 (717) that flying around with a wing preceding the devlopment of the supercritical airfoil. The MD-95 was developed in the same time period as the 737NG, but whereas Boeing developed a larger wing for the 737NG that was derived from the that of the wing on the “classics”, the design Incorporated a new supercritical profile. In contrast, McDonnel Douglas did nothing of that sort for the MD-95. They just did what they’d essentially had done since they developed the DC-10 — no new aircraft developed, while they just kept on tinkering with their DC-9 and DC-10 designs, for another 30-plus years.

    On a technical level alone, the comparison between the outdated 717 (at EIS) to the state-of-the-art CSeries is, therefore, nothing but ludicrous.

    • “They just did what they’d essentially had done since they developed the DC-10 — no new aircraft developed, while they just kept on tinkering with their DC-9 and DC-10 designs, for another 30-plus years.”

      Ironically, they then executed a reverse takeover of Boeing, which is why you can see the hallmarks of their corporate strategy all over Boeing’s current aircraft lineup.

    • Indeed, if I was a customer at Bernstein Research, I would immediately remove my marbles. Another short-sighted analyst who claims to be an expert. But what a lame, blind analysis that is a mimicry of a bad boy in need of intelligence. And then, what should we remember from this short summary: he believes, he believes, he believes, he believes, he believes, he believes, he believes, he believes, he believes, he believes, he believes, he believes, he believes believe, he believes. Could someone send him the song of Cher “I believe”? In short, how do you comment on such a poverty of gaze? How can we believe that Bellemare & Co. will support a family of two orphans, without saying anything, doing nothing? Another context, another time, another technology, another company, another vision of the future, another market, etc. When I think my grandmother has already entrusted her retirement savings to individuals like him, I understand better why she keeps all her money under her mattress!

      • Bernstein Research should be ashamed of employing this brain dead drooling moron!

    • “third FAL coming online in Tianjin, China by the mid 2020s.”

      The BBD/Airbus MOU says: if a 3rd CSeries FAL is needed, it will be in Mirabel.

  9. I believe Bombardier has the right to sell its share of CSALP to Airbus, not buy it back. Airbus has the right to buy the rest from Bombardier.

      • As far as I know bombardier can forced Airbus to buy his share but bombardier cannot buy back Airbus shares. That what I read if I remember correctly. Anybody got a link to the proposed contract between airbus and Bombardier that would say that Bombardier can buy the share back ?

        • The only asset that was sold (given) was the C Series.

          Not the rest of BBD.

          • What I meant is Bombardier has the right to sell its share of CSALP to Airbus (ie, Bombardier has a put option). Airbus has the right to buy Bombardier’s remaining share in CSALP (ie, Airbus has a call option). Bombardier does NOT have the right to buy Airbus’s interest in CSALP as the article stated.

          • Was wondering about a dilution clause details. If the other partners do not contribute to the cost of an FAL or developing an CS5 on what value is dilution based or are there some free carry involve up amount X due to the 1$ purchase price.

            Basically, did AB buy “debt” which they have to pay back by form of expenditure in the CS program?

          • Aren’t we at MOU stage and as such nothing is set in stone? Not that I am suggesting a reverse but they are still talking about talking from the document I have see. Nothing to complete until mid/late 2018

    • That is my understanding as well. Bellemare said, on that fateful day:

      1) BBD has a PUT (meaning they can sell their share at a predefined price and Airbus is forced to buy at that price). So, if Airbus drags their feet, Bombardier can force Airbus to pay for what they destroyed

      2) Airbus has a CALL (meaning that if Airbus does really well in marketing the CSeries, they can buy back the rest of Bombardier’s share of the CSeries partnership).

      The above gives all the incentives to Airbus to kick some butt, sell as much as they can, bring the price of the CSALP share ABOVE the CALL strike price and buy it all back for less than it would then be worth.

      Of course, if this happens, The QC and BBD shares of the CSALP would be worth a lot. They would be forced to “cash out” but with a good profit.

      Versus the current situation where the CSeries was still in a dire situation created by the tax haven-loving head of the Commerce Dept, Wilbur Ross.

      So, the incentives are that Airbus make this profitable. Of course, they could play the game of running the plane into the ground. At which point BBD could force Airbus to buy at the PUT strike price. So, yes, theoretically, there is a price that Airbus could pay to kill the CSeries.

      But I’d say this is “Boeing thinking”. I think the rest of the world thinks like venture capitalists.
      – CSeries is the startup new entrant that is reaching teenage years and needs an angel investor to take it to the next level
      – Bombardier could make the move of trying to go at it alone and risk ending up with nothing
      – Bombardier could make the move to partner up with someone bigger, crank out more planes and own a part of something that will be worth SOMETHING (contractually with these PUT/CALLs).

      I’d love to read the whole MOU on the CSALP but the above is my understanding. This is true capitalism at work. Not any of the protectionism junk we see from Boeing. And this is all very unfortunate because killing startups is very microsoft-like. Thankfully, we’re not stuck with InternetExplorer anymore…

  10. Exclusive: Doug Harned doesn’t know much about what he pontificates on. Another analysis that can only focus on risk rather than opportunities. Bernstein would be safer employing me.

    No way will Airbus shutter the CSeries. There are a multitude of reasons why.

    – A CS100/300/500 family offers airlines the benefits of commonality from 100-180 seats. An A320/A321/A322 family offers airlines the benefits of commonality from 180-250 seats. Yes, there is overlap, but with Airbus setting the pricing, that is not to their disadvantage as they can price higher than Boeing due to the family benefits.

    – The engines aren’t significantly different from those on A320 such that they don’t benefit from common parts and sub-assemblies (= economies of scale).

    – Same with other systems. If new parts on CSeries can do the same job for less weight, you can be damn sure Airbus will be looking at rolling them into A320 as routine CPD.

    – Shuttering the program would piss off a lot of airlines. Not exactly conducit to future orders.

    – A healthy and active CSeries line already means Airbus have one foot in next-generation single-aisles. The importance of a flawless entry into service of an A320/B737 replacement cannot be overstated. They have now a next gen cockpit along with the full avionics suite that can be put straight onto an A30X if they so wished.

    – They also get to proof test production methods for scaling up to the monthly rates required for next-gen single aisles. Even better, they can start to seriously split their production burden for much of the market across 3 lines – CS500, A320/21 and A30X-200/-300. Risk reduction on the most challenging ramp there will ever be in the history of aerospace.

    – The 717 was not a good aircraft, it received a lukewarm reception and eventually sold on the basis of reliability. The CSeries has already firm orders far beyond what the total production run of the 717 was. It also has CASM commensurate with the A320 which is also about 15% larger. A CS500 would see CASM significantly better than either A320 or B737-8.

    – The 717 being in demand on the used market indicates that there is a need for aircraft of the size of the CS100. Compare a CS100 to a 717, and in anything apart from acquisition cost, the CS100 wins hands down. Range, fuel burn, maintenance, dispatch reliability, inspection intervals, etc etc.

    – All sizing of potential market ignores the wing is ready for a CS500. How big is the 180 seat market? Airbus already have a problem in that they cannot shift enough premium priced A321s. They would make more money from selling an A321 and CS500 than they would from selling two A320s. Does that mean its worth starting on a CS500 right now? No. Does that mean its a fair certainty in 4-5 years time? Probably.

    Poor show from Bernstein, an analysis from someone who only half knows what they are talking about.

    • Maybe this guy has done a ton of research and the details are not published in the above article. Perhaps the moon is made from cheese.
      I agree with him that it’s going to be tough to make any money out of the Cseries, but this article is unenlightening. I suspect that the product and the production system are no where near finished and many billions more are required to be invested. Northern Ireland is a troublesome place to do business, that’s why there is so much government help. These are the sort of questions the writer should be asking about. If airbus is serious, then we will know fairly soon, as they need to to invest a lot of money and quickly to make a success of it. I suspect that the Chinese frightened Airbus into it.

        • That and the rioting, strike prone population.And thats just in the calm periods.

          • That and the rioting, strike prone population.And thats just in the calm periods.

            That’s nonsense.
            Northern Irish unions are just as likely or unlikely to go on strike as Welsh, German or French unions are. The last strike at BBD in Belfast was almost 15 years ago from what I can find – Airbus’ main plants in France and Germany can’t match that.
            As for the riots: Let’s keep things in perspective here… Bombardier/Shorts were a presence in NI during the Troubles. Nothing like that is happening any more – if they stayed during the Troubles, the occasional burning car these days is not going to turn them away now. (Just like Airbus isn’t turning away from Hamburg just because of the G20 riots there this year, or the occasional May day riots.)

          • I can’t recall the last time there was a strike or riot that affected Shorts.

            A quick google indicates it was 2003. The last one before that was 20 years before in 1983.

          • Bbd staff in N Ireland are constantly threatening strike action. When presented with the choice of a pay rise or job losses when Bbd hit trouble, they went for the pay rise.Unrepentant ex terrorists and various fanatics happy to play with setting the province on fire again,by petty squabbling for the last 6 months, leaving the place with no government.

          • Lets not forget the riots in Seattle when the G-8 met!

          • Grubbie you know very little about what you speak of.

            A couple of years back, the folks in Shorts were asked to take a pay cut (work extra hours with a pay freeze). They (quite understandably) turned that down. But throughout, discussions were amicable.

            The workers (and their unions) have not called for or even hinted at strike action in years. Even in the midst of the pay cut discussions and the lay-offs, both the union and the employees understood that BBD was under significant duress and didn’t exactly rock the boat. I was actually surprised at how well they took it.

            As for the politicians, entirely different story. Most of them should be shot. The place would be better off without them in charge – if only the civil servants were allowed to run the budgets. As for “setting the province on fire again”, it is more stable here than it has been for the past 50 years.

          • BTW – while I live in Ireland, I do not in any way work for BBD.

    • Bernstein Research should hire some of the real experts who post here but they are probably too deep into the big lie.

  11. It will sell. How can it not. It is the most advanced aircraft around. Nasty politics can hold it down for only so long. The comparison with the 717 is false and a deceptive one.’The C is from scratch and advanced. The 717 was an updated dinosaur that had to compete with contestantly evolving 737s.

      • I am not in the airline/aircraft business. But equipment Capex has a certain write down-life and tax breaks. Shareholders don’t like big Capex however, they want dividends.

        What matters in the long term is sustainability and operational efficiencies. We have the Delta model on the one hand and the Aeroflot model on the other. Both can work if you have clear objectives and manage it well.

    • “The 717 was an updated dinosaur”

      It was the market, or lack thereof, that killed the 717, not it’s technical merits. After all for such a “dinosaur” they are still being sought after today.

      • It was a pretty decent aircraft and the prices are really really low now.

      • I understood that the fatigue life of the DC9 (call it what you will) is the highest of any commercial aircraft ever in practice. Built to go on and on.

  12. The comparison between the B717 and the CSeries is mostly crap, sorry. There is a huge difference between these two deals: Boeing was never much interested into MD’s civil airliner programms but rather at their military ones. Further, they bought programms that were covered with own products that, in the case of the 737-600, didn’t sell as well. So Airbus has a complete different approach, as the CSeries is an usefull addition to their portfolio. Cancelling the programm will just strengthen Embraer’s position and I doubt that this is what Airbus wants…

  13. And then, otherwise, Scott, we just learned in the Quebec francophone press that Bombardier has just sent a 75-page document to the Department of Commerce in which it blames the US officials that they finally agreed to give answers and clarifications to Bombardier 13 minutes before the final deadline for submission of information required by the Department of Commerce !!! What bad faith! So, it’s not true that Bombardier was negligent not to have answered all the questions of this dubious department!

      • US institutions and corporate entities have a long history of not being forthcoming or having a concept of fairness.
        Lots of allegation but a scarceness of proof. Absolutely convoluted arguments to prove their case.
        Other countries less so.

  14. It would be interesting to know about the current supply deals. I think that there is risk sharing that makes it hard to reduce prices, but Airbus should be able to offer much higher volumes.If airbus think they can produce at a low enough cost, then they should get on with the CS 500 immediately.

  15. Have we savaged this analysist before?I hate to think that he’s a young guy just finding his feet.

  16. I think too much is being made that having 6-7 models in the 100-240 seat can be a good thing. When an airline buys a plane, its meant for many different routes, Small models test the market, then upgauging when ridership goes higher. So far having 3-4 single aisle models has worked out well and as far as the C series removing the A320 backlog, how many C series can be produced each month? Its too early to say if AB has made the right decision and I am sure they have an exit strategy in the contract if needed.

    • @steve:
      “I think too much is being made that having 6-7 models in the 100-240 seat can be a good thing.”
      Not true in regards to Airbus. They will only hv 5 main models/variants in that seat count mkt space even after accounting for CS1/3.

      Ok, may be 5.5 models if we categorize 321LR as 0.5 model.

      “When an airline buys a plane, its meant for many different routes..”
      Very true but only if we are talking about customers with similar network/frequency models & traffic volumes among each other. Unfortunately, U forgot a product portfolio is also meant for many different operators worldwide with various traffic levels in their specific route networks.

      Operationally, customer mission requirements for a 321Neo are very very diff than for a CS1. DL decided CS1 will co-exist with 321Ceo in mainline op is a perfect but extreme example……and they won’t be alone with:
      AC=CS3+Max9 combo
      KE=CS3+321Neo combo
      LX=CS1+321Ceo combo already in op

      All these fleet decisions were made long before the 1st rumor of Airbus grabbing CSeries into its own product portfolio was leaked….

      “Small models test the market, then upgauging when ridership goes higher”
      Isn’t the logic stated above aligning with why “having 6-7 models in the 100-240 seat can be a good thing”? Are U contradicting yourself?

      Besides, “Small models” may mean CS1 for some operators while it may mean 32oNeo for others for the same goal of “test the market”.

      “So far having 3-4 single aisle models has worked out well..”
      Only if 320Neo outselling 319Neo by a 72:1 ratio(similar story re Max8 vs Max7) can reasonably be defined as “worked out well”. Even the 330Neo family has lower disparity among members @ 34:1 ratio 339 vs 338.

      “…how many C series can be produced each month?”
      Ultimate rate geared @ 90~120 units per yr based on current supply chain scale so about 7.5~10 frames per mth:

      “Its too early to say if AB has made the right decision”
      Agree. But also “too early to say if AB has made the” wrong “decision”.

      “I am sure they have an exit strategy in the contract if needed.”
      Hope U are equally aware that they also have a complete takeover strategy in 7yrs written in the contract if needed.

  17. What kind of analysis is this?
    Just because Boeing let die and old outdated airframe doesn’t mean Airbus will do it to a brand new aircraft.

    Airbus didn’t eliminate a competitor. Airbus sucked Bombardier up for free due to Boeing’s prework.

    The CSeries is a good aircraft and has a future because Airbus has now nicely boxed the 737 between CSeries and A320. Another reason why Airbus will keep on producing A380s. Keep the 777 in the middle.

    Likely to remain unprofitable because airlines want aircraft free is not a bold argument.

    • What kind of analysis is this?
      Just because Boeing let die and old outdated airframe doesn’t mean Airbus will do it to a brand new aircraft.

      As part of the merger, Boeing got a few duds with absolutely no potential to develop them further, namely the MD-11 and the MD-95. Both technologically inferior to the competition and orphans, with no family environment. Remember the MD-11 did less well than the A340, which in retrospect wasn’t so hot, either. If the CSeries sells another 15 frames, it will have surpassed the total sales of the MD-95 and MD-11 combined.

      Contrary to Boeing at the time, Airbus is getting a 50% share in a fully developed plane at the start of its technological cycle.

      I’d rather see a parallel in the IT world here – EMC (now DellEMC) bought Isilon and Xtremio at the start of their respective technological lifecycles when they didn’t really have a competing product. They had development projects in those areas, some overlap with their existing portfolio, but no product as such. They didn’t shut down Isilon and Xtremio, but continued to invest in them as they knew those were the technological platforms with the best future outlook. Both products, especially Xtremio, are part of the reason DellEMC has continued to be a market leader across various segments for ages and ages now.

  18. The CSeries program is becoming a joint venture between Airbus (50%) and Bombardier+Quebec (50%), just like the ATR program is a joint venture between Airbus (50%) and Leonardo (50%).

    Why do anyone expect Airbus to act differently?

    • @Meg:
      “Why do anyone expect Airbus to act differently?”
      Probably because for the same RFP fm any given customer, U won’t see a 319Neo campaign fm Airbus against a ATR72 campaign fm ATR. In contrast, U will easily see a 319Neo campaign against a CS3 campaign….

      Not saying I expect Airbus will shut down CSeries program though….especially when Airbus stated they are instead effectively burying the 319Neo future.

  19. Another upside that has been absent for a while from discussions is when price of oil spikes up again, Airbus will have an “off the shelf” readily available product will meet airline needs….don’t know by then how Boeing will be able to push their smallest models?

    • Hmm different markets as has been pointed out many times in these comments these past moths.

      • Wing optimization is always an issue for an aircraft family, with the smaller most times being the “long range” heavy aircraft for example.

        With the C-series you could have a CS”5″ with 160 seats and a 320 with 160 seats, two different wings and engine outputs that compliment each for different airline requirements/missions.

        Not bad for 1$.

  20. There are conflicts of interest on C Series being sold by Airbus. If it has a slight opportunity to sell A319/320 instead of CS300, it will push for it as the equity ownership is 100% in the former and 50% on the latter. Why would Airbus be incentivized to share the profits with Bombardier/Quebec?

    It got for free all the technology embedded in the C Series, which seems much more important than making this family a commercial success.

    • There are conflicts of interest on C Series being sold by Airbus. If it has a slight opportunity to sell A319/320 instead of CS300, it will push for it as the equity ownership is 100% in the former and 50% on the latter. Why would Airbus be incentivized to share the profits with Bombardier/Quebec?

      Because they’re also building an FAL for the plane and they’d want to recoup that investment?
      Because 100% of all profit on sales after 2023 would go into Airbus’ pocket?
      Because 100% of all profit from after-sales support etc. after 2023 would go into Airbus’ pocket?
      Because it’s better to have a fully developed plane that is certified, has entered service, known performance data and an established customer base, than having just a bunch of patents and needing to develop a plane based on that, with another few billion quid (plus a few years) required to actually do this?
      Because 50% of a CSeries sale is better than 0% of an Embraer or 737-7 sale?
      Because not everybody thinks that shutting down the competition is as wise as acquiring it and actually putting it to use?
      I’m sure the list can be continued easily, and Airbus themselves have said that the CSeries is going to be a 100% Airbus programme and will be put ahead of the A319 in sales campaigns. They wouldn’t tarnish their own product (the A319) that way if they didn’t actually mean it.
      Does this guarantee the success of the CSeries? Of course not.
      But to me all of the signs so far show that Airbus is serious about this and are not acquiring the CSeries with the plan to shut it down.

      • After 2023, then, Airbus could focus (commercially) 100% on the C Series.
        I am not saying it will shut the program down, but just highlighting that while it has a 50% equity stake on the C Series, it makes sense for Airbus to push harder on the A319/320.
        Take JetBlue as an example.. maybe the CS300 would be a better aircraft for the airline than the A320neo already ordered.. still, Airbus has no incentive to replace these orders.
        Of course, if it is about to lose a client for a E2-195 or 737-7 instead of a A319/320, Airbus will for sure push for CS300 sales.
        About the investments in the FAL… it seems a very low price for Airbus to acquire the controlling ownership of C Series (given the zero payment for the deal).. if it gets one additional and sizable order of A320neo due to lower competition from CS300, the FAL investment would already be paid – the sale does not necessarily need to be a CS300.

        • If Airbus can sell the C series they can shift the production of the A3210 to the A321 and make much more money as Boeing has no response there, nor does it have for the C series.

          Win Win

        • Take JetBlue as an example.. maybe the CS300 would be a better aircraft for the airline than the A320neo already ordered.. still, Airbus has no incentive to replace these orders.
          Who said anything about replacing existing A32S orders, especially A320/A321?
          Unless the CS500 is launched, the CSeries only really covers the A319neo/737-7, which are pretty much dead anyway because they’re not efficient enough.

          if it gets one additional and sizable order of A320neo due to lower competition from CS300, the FAL investment would already be paid – the sale does not necessarily need to be a CS300.

          That’s a very weird way of calculating “paying for” an FAL.
          Firstly, because “one sizable order” certainly doesn’t generate enough profit to pay for a new FAL for a new aircraft family. Secondly, because this has so far absolutely not been the way Airbus operates. Thirdly, because it leaves out the potential for additional profit that can be generated by actually using the new FAL for its purpose, i.e. building CSeries. The A320 assembly lines are already ticking away nicely at or near full capacity. Any CSeries sale (maybe alongside some A320 and A321 as a nice package deal) is still a profit for Airbus. And remember: While Airbus only has a 50% share in income, they don’t have to use any of that income to cover development costs.

    • Airbus is mainly sold-out on A320neo family Aircrafts for many years. Hence opening a new FAL for both A321’s and CS-500 in Mobile can be profitable and increase deliveries of A321neo’s as well.

    • I don’t think that Airbus is in urgent need of technology infusion. ( That was in a way valid for Boeing before the 787. Worked around via using Airbus suppliers )

      Today a certified Airframe has significant worth. certification is costly. Creating FAL sites is established knowhow. reasonable cost, low risk.

      Looking at the backlog ad pricing it makes much more sense for Airbus to sell A321 than A319.
      Just like selling A330 instead of A350-800 it makes sense for Airbus to sell C-Series while demoting A319 maybe even some A320 for gaining A321 slots. They share C-Series profits if there are any and keep A321 profits in their pocket 🙂

      • Very good point on the 321 slots and profits.

        But the non-availability of the 350-800 resulted that AB has lost sales to the 787-9 while the 330NEO’s are not selling. Turkey is a big one for example.

        The biggest likely to come if EK orders 789/J’s. If AB had the complete family of 358/9/K it would have been a no-brainer to many airlines including EK?

        Hopefully AB is working on an 350-800New with UF-engines, new wing, etc. that could fly around 2025 when the 350 production line is starting to dry up based on current orders.

        • Uwe: Agreed.

          It does free up a lot of interesting possibilities as the A320 winds down and the C series (C500) takes over and they move to the more lucrative A321.

        • But the A358 is offered/was offered and as it’s a shrink it’s not a very efficiant plane. It has not been built because of lack of orders.
          Actually, B789 is a damn good plane fits a lot of routes and airlines.
          And Boeing is selling it agressivly.

  21. Remember the early days of the 757 when oil was cheap and the market stuck to old iron, refusing to invest in new technology. Once fuel spiked up they all run to knock on Boeing’s door.

    • Too true, the early sales demand of a product in this industry tends to be a poor indicator of longevity. Many aircraft have struggled through early sales droughts only to ‘come good’ due to changing circumstance. You could argue the B747 was hurting until the DC10 had safety issues or the A300 was near dead until the oil price shock. The B737 was nearly got rid of to the Japanese in the early 70s because of its perceived lack of importance. That last one makes me smile a bit what could have been….

      • Hi! Could you elaborate on your comment about the 737 nearly being offloaded to the Japanese in the 70’s? What a very interesting detail.
        In fact, half of the board in Seattle did not want to launch the 737 programme in the first place!

        • I thought it was common knowledge. In the early 70s when Boeing was going through very difficult times it looked at a range of options to dramatically reduce its cost base. One seriously considered option was to offload the whole B737 programme as at that stage it was struggling against the DC9.

          My reference point for that was a book on the B747 called ‘Widebody’ (I think!!) , a great read charting the evolution of Boeing jetliners and predominantly on the gestation of the B747. It was my first foray into the world of commercial aviation in print and got me hooked.

  22. From an economics perspective, he has a point that the CS will face headwinds on price. What’s that say about A or B developing a CFRP new single aisle? No EIS until 2035. Now that the CS wing is here, why throw it away? Seems like a bad financial decision, plus I don’t think the 49.99 percent of the partnership would be too pleased.

    • Don’t all new aircraft face similar headwinds?? Airbus have avoided something like $4bn of the spend and the early unit costs must already be tumbling. Factor in some hefty supplier negotiations and production know how and they will be sitting pretty come 2022. It is always a long game.

  23. If Airbus wants to close the production of Cseries. Airbus just had to wait a bit because Bombardier was headed for bankruptcy. No need to open an assembly line in the United States. Airbus has not sold an A319 for five years. Airbus has a modern aircraft for sale that is already on the market and is very popular with its current customers. No risk, just the profit to cash.

  24. Sorry, but I’m going to all BS on that analysis, as I don’t think the MD-95 and the CSeries are comparable at all, nor is the MDD/Boeing merger to the BBD/Airbus deal, nor are the companies involved, nor are their cultures.

    * The MD-95 was the very last orphan child of a plane series that hadn’t been competitive for a while (the CSeries has already sold more than twice as many frames as the MD-95/717 did over its 10-year production run)
    * The MD-95 base design (DC-9) was about the same age as the 737. The 737 had just had a proper makeover, was available in different sizes… and was actually selling
    * The MD-95 was never going to be the basis of a new model family or similar, because… well, see above, it was the very last possible iteration of a 30-year old design. There was no inherent advantage of investing into the MD-95 over the 737.
    * The MD-95 was built at an orphan FAL with very low production rates.

    Contrast that to the CSeries:
    * Brand new plane that gets excellent reviews from operators and passengers, and that exceeds performance guarantees
    * Competition from A and B has basically stopped selling
    * Has Boeing worried enough to file a lawsuit against it
    * Potential to stretch/re-engine/etc. (i.e. potential to be an easy way of covering the lower end of the A320 replacement), as it is just at the beginning of its technological lifecycle
    * Airbus commits to building a new FAL for the plane

    At the price Airbus is paying, they’d be absolutely mad to bin the the CSeries – unless it really, really, really doesn’t sell. But if even BBD, with the various problems they have as a company, managed to sell jus over 340 of them, with another rumoured 30 in the works, I’m quite sure the CSeries can do [i]a lot[/i] better with Airbus’ marketing and support clout behind it.

  25. Let me restate here what I’ve said elsewhere before : intended as a ‘feeder’, C Series are all (-100/-300/-X ?) obsolete in the egg unless re-classified under ‘regional jets’. Same goes for MAX7/8 for the same reason : faltering groundworthiness due to unavailability of containerised Cargo Loading System, penalising airport turn-around performance/cargo capability.

    To qualify as proper ‘feeders’ whereby to join the exclusive club formed by stam-member A32X with freshmen MC21-X and C919-X trailing close, is not possible for bulk-loaded underbelly designs such as MAX and C Series. This is second decade of XXIst Century, folks ! BBD and BA must get their homework right beforehand. The crave for airport turn-around ergonomics is a reality ! Only due to persistent unsufficient supply of ‘feeders’ can other obsolete ersatz narrowbody types still hope to sell in some numbers, but that will progressively fade away.

    Full stop ! Protests are at no avail.

    • Ryanair and southwest seem to be surviving. It’s pretty rare that I do a flight of more than 2 1/2hours in Europe. I would be interested to see how many Ryanair and easyJet flights could be performed by the CS 500.

      • LCC’s obvious niche is their low pricing but also have the convenience of a vast selection of routes. However in many instance these destinations are only served 2 or 3 times a week. An CS300 (-100) could give the flexibility to an airline to increase this frequency on routes.

        The CS300 cabin length is actually interesting, at 32″ pitch it seats 145, for every 1″ you reduce you add one row (5pax), 30″, +2 rows, 155 pax. Not sure about a theoretical CS500 with high density seating regarding exit limits, range, field performance, etc.

        The CS300 could be the smaller brother equivalent of the 320’s and 737-800’s for LCC’s and do that at very good comfort levels.

        In the US Jetblue, Spirit and Frontier are obvious potential customers, in Europe easyJet (Wizz?), etc.

        • @Anton:
          “The CS300 cabin length is actually interesting, at 32″ pitch it seats 145, for every 1″ you reduce you add one row (5pax), 30″, +2 rows, 155 pax. ”
          I suggest U skip all these calculations+estimations and go straight to Cseries website and take a look of the actual CS3 seat map in hi-density config with 160seats:

          “The CS300 could be the smaller brother equivalent of the 320’s and 737-800’s for LCC”
          Also for FSCs in which LX, KE and AC is doing/will do precisely that.

          CS3 is naturally the “smaller brother equivalent” because it does the same job as a 319Ceo/Neo or 73G/Max7 in any chosen cabin config. The only drawback is that CS3 is not a 320 nor 737 family member….

          • The 320’s replacement (NSA) could potentially more similarities with the CS?

          • FLX another of my matchbox aeronautics, the 3.7m shrink from the CS3 to CS1 reduced 1.8T on OEW and -25pax.

            If the CS3 is stretched by 3.7m say add 2T (and 25 pax) it’s OEW will be around 39T, the 320NEO looks like around 43-4T.

            If you keep the CS5’s MTOW at 68T (to minimize changes) you will need to drop fuel by around 4.5T which is in the order of 2 hours (~900Nm).

            Range with 155 pax should still be around 2500Nm which will make an aircraft with potentially very good seat mile costs?

  26. Is Doug Harned, the analyst for Bernstein Research on Boeing payroll. Looks like Boeing is back to its old cheap tricks. They will try anything to make the Cseries deal look bad.
    They should admit they lost, screwed it up and thought they could get the Cseries to their knees and have a 100% ownership for free. Well Boeing, swallow it.

    • Please feel free to provide proof of claim that Doug Harned is on Boeing’s payroll….

      • I am saying “is he”, only time will tell if he got indirect funds from Boeing.

        Just because you’re an analyst, it does not mean your impartial.

        • @frankmar:
          He doesn’t need to be on Boeing’s payroll. All he needs are patrons who own e.g. significant chunks of Boeing shares or derivatives and then write analysis that can help improve valuation of Boeing shares. He can also achieve the same goal in reverse on behalf of patrons who own short position on BBD shares or derivatives.

          Investment analysts do take side in any industry sector, nothing new here. They are sophisticated instruments of investors focused on RoI & risk, not civil aerospace enthusiasts focused on the nex great product or tech.

      • Of course he’s on Boeing’s payroll! Haven’t you learned any analyst that ever casts doubt on anything Airbus MUST be on Boeing’s payroll!

  27. A week ago… The deal of the century!

    This week… Not so much.

    Shock has worn off and people have had time to digest the details of the deal a bit more. You’re likely to hear more negative info in the near future.

    imo, I don’t think AB will complete the deal, with all the other stuff going on? Just saying…

    • @ observer

      Oucould be right as there will be a change in Airbus senior management team soon. Who will be tainted from the emerging scandals is anyone’s guess but with a new team comes new strategic imperatives. At present this deal is peripheral to AB. I personally believe whoever it will become a fulcrum for future development.

  28. Well, of course they could terminate it, just like any other manufacturer would shut down any non-profitable program. What a no-message.

  29. Seems that prospects for Boeing to build a 767-300ER Revive is on the increase.

    Is this a sign that they could go for an NSA first or going for a smaller (shorter) NMA that is around 200-220 seats that is pitched at the upper end of the single aisles where the 321 rules and compete with AB’s potential 322?

    This could give them the ability to build initially a 130-180 seat focused NSA instead of 130-220 seat NSA family?

    • Maybe United is not convinced that Boeing will launch the 797? Or they try to throw in this idea to get a handle for the negotiations with Airbus?

      Right now the only planes to replace the 767 with are the A330-200 and -800. Airbus know that and they sure intend to make some money selling them to United.

      It would also look bad for Boeing if they would loose this key customer in this product segment. It looks like for that reason Boeing is willing to sell 767s at bargain prices.

      The dilemma for Boeing is manyfold:
      1) At the price requested by their customers they could only build an aluminum plane.
      2) If they develop an aluminum plane, it could easily be made obsolete by a competitor who develops a carbon plane in reply.
      3) There are no facilities and production methods available for a mid-sized carbon plane.
      4) Apparently no modern engine of the proper size (with geared fan) will be available soon, and will of course not be developed before Boeing launches. (GE sitting on their hands regarding geared fans? P&W buried deep in getting the 1000-Series up and running? RR busy with the Advance3 for the A380?)
      5) Whatever path to follow, this plane will not improve the profitability and cash-flow of the corporation any time soon.

      The more I think about it, the more I don’t believe the 797 will be launched this year or the next.

      Coming back to the simplistic article mentioned above: Airbus is certainly considering developing the next generation single aisle plane. The acquisition of the C-Series opens a clear path, as it allows them to optimize for the large end of this category, especially if the CS500 will be added. Most probably with carbon wings and Al-Li body. This means that the largest variant will be a perfect replacement for the 757 and even a big chunk of the 767-market.

      • A thought that crossed my mind is that airlines could actually look to replace 330-200’s with and updated 767-300ER?!

        The 338 is not selling, its heavy and its not cheap, the 763ER is actually still listed, 2017 prices, at $197M, the 332 at $234M and 338 at $255M. The 763ER has an OEW of 30T (25% less) than then the 332/338.

        With a new cockpit, cabin (737MAX like), wing clean-ups it could become a very interesting option for airlines. Biggest draw backs the LD2 vs 332’s LD3’s and availability of a newer engine.

        However, a 763ER still burns at least 10% fuel less per pax on a 3000Nm sector than an 332. If a suitably improved engine with thrust around 60Klb could become available its game on?

        • Delta is actually the biggest 767 operator (80), then United (50), other operators with >10 767’s are AA, Air Canada/Rogue, ANA, BA, Condor, JAL.

          I can see interest in a 763ER-Revive of 200-300 aircraft? This could be significantly bigger if 332 operators that don’t want 338’s or 788’s jump ship to a low cost plausible option.

          This could give Boeing the time and space to focus the 797 around 220-240 seats which is effectively the upper end of the single aisles and when the NSA come around it could focus on the <200 seat market.

          It will have better pax comfort and much better planing and de-planing characteristics which could give it applications from 500Nm high density to low density 5000Nm routes.

        • Anton, the math is what drove the 767 out of business and be replaced by the A330: The production cost of the larger A330 is pretty much the same as the smaller 767. Forget about list prices – you would have to compare actual sales prices including the outfit. Fuel consumption of both planes with identical load and mission is almost identical.

          Bottom line: Airlines can have a more modern plane with a much better cockpit, container capabilities at the same price and mission cost, but which can rake in a lot more revenue whenever you can fill it.

          To make the 767 competitive it need new engines, a new cockpit, container capability, a new wing, a new body, new landing gears, new electronics and hydraulics, larger windows,… you get my meaning?

          • Agree is not an apples with apples comparison but isn’t the 338 not just to mach aircraft, 30 tons more on OEW is the equivalent of 300 pax with luggage. Even airlines with longer thin route requirements don’t want the 338’s.

            Always talked about a lighter shorter range 338, maybe the answer is for a shorter range and lighter 339 that could take on the 789 where its often used for <4000Nm applications (data suggest that the OEW's of the 338 and 339 is very similar?).

            Ditch the 332/338 and build a 5000-6000Nm 240 seat all plastic MoM-Bus with UF engines (~50KLb?).

          • @ Anton
            Surely the A330-200/800 is a lot more plane than the 767-300ER. It’s quite a lot bigger in every respect and so of course it is more heavy. But…
            There is the aerodynamic to begin with. The wings of the A330 are much longer – 60.5 meter against 47.5 m, which reduces the induced drag significantly. The Airbus also has a much more modern profile (supercritical) which reduces the parasitic/wave drag.

            This much more modern and efficient wing alone makes it possible that the A330 carries its higher weight and additional passengers and also a lot more freight at almost no additional fuel expenses.

            The production method of the A330 is also more modern and from all I know a lot more economical than that of the 767. The result is that although there is more material used, total production cost of the A330 are not higher than the 767.

            So this is really not an issue of “too much plane” as you may have heard when two planes of similar performance and only different size are compared. The A330 is vastly superior product and has thus ended the career of the 767 for good.

          • But its not selling, airlines are changing from 330 to 787’s. Actually I don’t know why Boeing wants to build a MoM, if its not there they will buy the 787’s, not 330Neo’s.

            So Boeing’s priority should be the larger of an NSA that will make the 322 look old, and the stories about they can sell the 322 cheap, no go, the 339 is more expensive than a more capable 789.

            Now I made up my mind (guess for not long), Boeing’s priority should be a MC21 size cabin width, 757-200 length/pax, 4500Nm range NSA. Combined with the short range MAX10 it will pull the plug from the 321’s dominance laying golden eggs for AB.

          • Gundolf:

            That’s like saying an A380 is the ideal aircraft because its seat costs are so low.

            A full 767 pays far better than a 60% full A330 of any kind.

            The 767 was not an A330 class aircraft, it was an A300/310 class aircraft and killed that variant.

            As we see, airlines bulked up on 767 and the replacement cycle vs the procurement needs (routs) shifted to the new A330 for which Boeing had no answer.

            Some of those 767 routes will have moved up and now A330, but not all.

            Doesn’t change the picture. ANA and JAL are keeping newer 767s, its the older ones they have sold.

            Sales depend on how well the 767 fits a route and or the A330 does not.

          • @TransWorld
            Trip costs of the 767-300ER and A330-200 are in fact almost identical. I know that can be hard to swallow, as the A330 is so much larger, but that is the effect of much better aerodynamics and + more modern engines + much more advanced flight control systems.

            The only reason the 767 still lives is that there are not enough A330s around, that is to say “cheap” A330, as their value or leasing rates are easily twice that of comparable 767s. And that is easy to understand, as airlines value the capabilities of this plane. Although the prices and leasing rates of the A330 are quite high, of all widebodies they are the easiest to place with airlines.

            The A330NEO will sell very much like the A330 has sold all those years – lots of small orders coming in rather quietly from all around the world, adding up to impressive numbers over the years.

        • 767-300ER probably uses more fuel for quite a bit less capacity than a A330-800.

    • Any significant requirements circumvention
      in grandfathering off a 767?

      Neither the wing(profile) nor the high lift layout is competitive anymore. FBW has so many advantages …

        • 737 has “significant requirements circumvention
          from grandfathering”. one reason the 757 died and the 737 not.

  30. The analogy with the MD95 does seem a stretch but I’m sure Harned has more and better access to key people presently in the supplier bases and buyers to be able to make a more informed decision than most people posting replies here. Perhaps everyone posting replies here.

    What would be helpful is some indication of whether the cost challenges he hears is from larger suppliers, smaller suppliers, those common to both Bombardier and Airbus (a very cursory look at the A320 and C-Series at Airframer shows many common suppliers for the 2 lines) or those different. Plus perhaps whether he has contemplated the role that eg additive manufacturing could have in insourcing vs outsourcing in the relatively near future.

    Personally I think that, assuming the deal goes through in ’18 as announced, if we see any substantial effort by Airbus to converge business cultures, operating and production processes near term after that then I’d be confident the C-Series will survive long term whether as 100% Airbus or an ongoing JV with Bombardier or a JV with eg China.

  31. How feasible is it for Airbus to deliver significant commonality between its narrowbodies and C Series?
    If it does not work as expected, E2-190/195 should be above the CS100 due to better combination of fuel consumption per seat and/or per trip.
    If the route has higher density, CS300 would be a better option from a revenue/yield perspective, but would still have disadvantage vs E2-195 on the cost side (same cost per seat, but higher cost per trip).
    Both CS300 and E2-195 would be superior than A320neo on this cost analysis , I believe.

  32. The C Series is not an orphan because the platform was design with evolution in mind. If all non profitable programs from Boeing, Airbus and others would be shutdown today many planes would be missing in the sky. C Series is an amazing product design proudly in Canada and that shook the big boys on their foundations. If airlines where not managed by bean coutner more preoccupy by reducing seat pitch and nickel and dimming the customers they would see the value of that amazing plane and pay a fair price. But anyway Hyperloop might be coming to a town near you and it might change the game on many routes. I just hope they dont ever fall in the trap airlines have fallen into.

  33. I cant disagree more.

    Cs is the most modern SA airplane, a clean sheet design and multi purpose.
    It competes with E2 series as regional jet and with small versions of A320 B737.

    MD – 95 did had a lack of new tech, from a basically 30 year old design.
    A inhouse competitor with the B737.
    And MDD had already been in struggle, an aging MD 11 and the old DC9 derivates as MD88/90/95 were the only civil airplanes.
    MD11 was dead due to Boeings B777 and why should Boeing continue to sell B717 over their B737-600?

    While CS is in a very different position. Modern, ahead in tech, against not selling inhouse competition A319neo (and also B737-7max).
    Why should Airbus stop to sell?
    It would be stupid.

    It gives a lot of strategic options, move the A320family up around the A321, stretch it again and offer an A322neo with 270pax and let the CS do the 100-170 Pax segment.
    Stretch the CS up to a 500, placing it just under the A320neo with 189pax max. about 180.
    And built an A320 sucessor with 200- 235 -270pax.

    I would not count the superior airplane out, now with all that uncertainty gone.

    Also, CS now has 390 orders, that’s far from end.
    It’s a begininig.
    I’m damn sure Airbus will make money from CS.

  34. Wasn’t this ground already covered in my posts, and Uwe and Anton’s replies, about a week ago in the comments (since removed) following the ‘War…’ article? The only thing this guy left out was the possibility that AB is doing this to court favor with Delta for a future purchase.
    1. They are not going to stretch it to encroach on the cash cow.
    2. If it goes away they start selling A319s again.
    3. It is great airplane, but that doesn’t make it broadly marketable.
    4 The guys who are shrinking the bathrooms to squeeze more seats just don’t have the DNA for this.
    5. It is probably not worth the disruption for a niche aircraft, except as stated above.
    6. (new) Bombardier should stay with this. They have started new markets before and are on the verge of starting what another publication calls the ‘Crossover’ market.
    7. (new) Where are the lessors in all this? Do they already know this is not real? (Scott?)


    • How can you say selling A319s again? A319 is as dead as the A318 as B737-600 and B737-7max.

      It has close to 400 sales. thats a lot.

      With an so sucessfull A321neo, Airbus will deliver it’s A320neos and try to upgrade as many orders as possible to A321neo for margin.
      This leaves space for a CS 500 EIS early 2020ies.

      And there are rumors that AB can overtake the whole program- sounds sensefull.

  35. One stupid question:
    How big is the probability that AB will sell CSeries and A380 in a bundle?
    They cannot cut costs with the A380 any more, maybe it would help the overall cost calculation to lower the costs for the needed connection flights to smaller airports?

    About commonality:
    An airline could order both jets with P&W engines, these are from the same engine family. I assume that you then can get a better price and also save some maintenance costs due to similarities.

  36. The C series has leading edge maintenance programs combined with technology to make it a winner with the right marketing that Airbus brings. The market that the C series serves is the next market to emerge and one which neither Airbus nor Boeing have a product to compete. Airbus is not taking out a competitor as Bombardier was NOT competing with anything either of the big two have on the shelf. This is no 717, its a relevant product that adopts leading technologies that given the confidence that Airbus brings, will thrive.

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