June 8, 2018, © Leeham News: Airbus assumes its 50.01% majority stake in the Bombardier C Series program July 1, the two companies announced today.
The company is called C Series Aircraft Limited Partnership, or CSALP.
The CS100 and CS300 may be renamed the A210 and A230, according to a previous press report.
A C Series Final Assembly Line will be constructed in Mobile (AL), next to the Airbus A320 FAL, to serve the US market.
The transaction is closed well ahead of the original schedule, said Harald Wilhelm CFO Airbus, during a conference call.
Combining Airbus’ global reach and scale with the C Series platform will “unlock” the potential of the C Series, he said. Airbus’ marketing, procurement and product support system will benefit C Series, he said.
John di Bert, CFO of Bombardier, said the partnership means the aircraft can reach its full potential. “This is a defining moment for the C Series…and a game-changing moment for the 2,000 employees of the C Series program.”
Di Bert also praised the government of Quebec for its support.
Philippe Balducchi is the new CEO of the C Series Program. There is no announcement about rebranding the aircraft today, he said. A previous press report suggested the airplane will be renamed the CS210 (CS100) and A230 (CS300).
Wilhelm downplayed the prospect of a stretched C Series, the oft-talked about CS500, which would complete directly with the A320. Focus is on the ramp up of the C Series and ramp up of the A320 production to 60 next year and as much as 70 in the near future.
Construction of the Mobile (AL) Final Assembly Line begins next year for an initial capacity of 4/mo. The first aircraft will be delivered from the plant in 2020, officials said.
The plant is intended to supply aircraft for the US market. Whether the production rate for the Mobile plant increases beyond 4/mo depends on US demand.
The Mobile A320 plant had an initial rate of 4/mo and a capacity of 8/mo. The rate is going to 6/mo.
Mirabel remains the main C Series assembly plant with a maximum planned rate of 10/mo.
The combination presents a major challenge or Boeing and Embraer.
For Boeing, Airbus now has a brand new airplane design at the lower end of the mainline aircraft market, competing with the 737-7 MAX. Following Boeing’s redesign of the 7 MAX, adding 12 seats, LNC’s analysis is that that 7 MAX and the CS300—now called the A230—are about equal on seat-mile costs. (The CS300 had a significant advantage over the original 7 MAX design.)
The A230 continues to have a trip cost advantage over the 7 MAX, LNC’s analysis shows.
But Airbus now has a viable 100-seat product offering in the CS100 that Boeing does not have.
Against Embraer, the marketing heft of Airbus breathes new life into the C Series that the struggling Bombardier just could not achieve.
The CS100 competes with the Embraer E190-E1/E2. The E190 is slightly smaller than the A210 and has slightly less range but operationally for most airlines, the in-service use places the two aircraft in the same category.
The Airbus marketing and global product support network gives the C Series an advantage over Embraer.
These factors almost certainly led Boeing and Embraer to pursue to combination to create a new company (“Newco,” as we call it) that will likely be confined to EMB’s Commercial Aviation division and be super-majority owned by Boeing.
Brazilian press reports suggest an agreement could be reached by year-end.
A combination would give the EJet the same type global marketing and product support system that C Series gets from the Airbus combination—although it is noted Embraer’s product support system is better than Bombardier’s on a stand-alone basis.
While the E195-E2 and, to a lesser extent, the E190-E2, help fill in Boeing’s product line below the 7 MAX, the C Series seems a better fit for Airbus than EJet is for Boeing.
Will the C series sales count in the sales race between Airbus and Boeing? I suspect Airbus will count them since now they call the C series planes A210 and A230.
Gary – we should be careful always to compare oranges with oranges in such counts. Nevertheless, the two OEMs use different parameters for their market forecasts, so nor have those published numbers been directly comparable. We just have to remember to define our terms, whatever we call the airplanes.
Well Boeing claims Douglas and MD history, so once you buy something its production and history is all yours.
That will have Boeing’s undies in a twist.
Airbus hasn’t bought Bombardier. They bought a controlling interest in the CSeries, so yes they can include the rather limited deliveries of CSeries aircraft over the last couple of years but not the thousands of aircraft Bombardier has delivered.
Transworld – again, provided we define our terms. Today’s Boeing Company is quite at liberty to claim that all aircraft designs for which, say, it holds the Type Certificate are part of its history, inheritance – whatever – but it must be careful not simultaneously to claim to have produced those aircraft built by A N Other. It must be clear that total Boeing airplane production of X units includes those manufactured in another place, in another time. (Likewise, Airbus did not manufacture, say, the Caravelle.)
What a great news for Bombardier and a bad one for Boeing,
This step proofs that Airbus is a big competitor to Boeing, and a great leader in this field.
Canadian CS series of plane are very advanced plane deserve to take its place among other types of plane within this size.
I first read CSALP as SCALP 🙂
Ivorycoast – Quite: my spell-checker’s been offering me that, too.
And didn’t someone or other once suggest that if Bombardier took the C Series road it would be swallowed whole? Well, in the event, perhaps not completely whole.
I expect some triumphalism from a certain corner over this deal conclusion, but really, without the CS500, this whole series was a rather odd wasted development.
Unless there really is a market demand for production in the actual 20 frames a month area, and Pratt can somehow support this and their share of A320 and other deliveries (hahahahaha, rofl), this in fact represents a neutering of a potential competitor vs the Boeing Airbus duopoly, and not much more. Well, other than Airbus getting away once again with not having to fund/finance development of a new model themselves. The Alabama plans still being in place seems to be a recognition that the Mirabel labor situation is intractable, I guess, as the US threatened tariffs were abandoned, I thought.
Is your prediction skills so much better than the people who make planes?
“Airbus in 2014, the last year the OEM segmented the sector in its 20-year forecast, predicted a demand of 4,363 aircraft.
Boeing, which hasn’t publicly segmented the sector, is believed to have forecast a demand between 4,185 and 6,275 in 2013, based on information revealed during various executive presentations. The mid-point was 5,230.
In announcing the acquisition by Airbus of 50.01% of the CSeries program, Airbus CEO Tom Enders cited a 20-year demand of 6,000 aircraft.-LNR
Say 200 a year production will give 4000 planes over 20 years.
By comparison E series , which is a different segment, started deliveries in 2002 and in 15 years delivered 1400.
I think Csalp will be happy if it came to that.
The 100-150 seat market is pretty much a disaster. Bombardier expected to get half of 6000 aircraft over 20 years, or 150 units per year. In the ten years the C Series has been for sale, total orders are 400 units. This is why Airbus got what seems to be a pretty well designed airplane for free.
The competing Max7 is good as dead. The largest operator of 737-700, Southwest, had a fleet of 512 but only ordered 30 Max7s. They then deferred 23 to 2024, deciding whether to even keep the 7. They have orders for 263 Max8 and 738. There are only about 30 unclouded Max7 orders in total. The 319 is worse.
Maybe with aggressive cost reductions enabling aggressive pricing and the Bombardier survivability question removed, things will be different. But since it is too big for the regionals and too small for LCCs, it could just as easily go the MD80-717 route to oblivion.
Texl1649: Me thinks the tribalism goes both ways.
Me, I think its interesting, I am glad to see it get the boost the beauty of its design and execution deserve.
How it all plays out is to be seen. It may work out and it may not or someplace in between.
It certainly gives Airbus a leg up on a new offering (CS500) without having to try to design an entire new single aisle to get down to the very low end.
And so what if Airbus bought it, Boeing could have as well and opted not to. Sour grapes there me thinks.
Boeing backed them into a corner and they did the best they could to continue the program to recoup the investment, and that also means jobs.
Being one of the bottom feeders in todays society (though highly skilled and capable) I am all for that.
These are some good points. I’m surely not bitter about Boeing’s decisions here but I’m also dubious about its future fit at Airbus. If the “heart” of the mainline narrow body has shifted to the 321/737-10 size, the CS500 would seem to be not ideal as a baseline for an A320 replacement, and competitor to a future Boeing NSA.
It’s an interesting and seemingly well engineered niche plane, today, with a miniscule real world production capability relative to the market, capped now under the true market heart.
Not sure I follow here. If the “heart” of the market moves to A321/MAX10 size, then surely that’s what the NSA will optimize for. In that case the only modern (non-internal) competition for the CS500 would then be a NSA shrink, and shrinks are rarely cost competitive (see MAX7/A319 v CS300, A358 v B789, etc.).
Given the size of the overall NB market today, being the only competitive airframe in a segment that’s reasonably close to, but not at, the heart of the NB market would seem very attractive.
One more comment on the 717: It was exactly the CS100 but the market was better. 130 seats at 28in, five abreast, well received by the few airlines that ordered it, and it sold only 155 units in ten years.
Fifteen years later after 40% traffic growth, the CS100 sells 123 units in ten years. The 717 equivalent given traffic growth would be 217 units, 76% better sales and it still got cancelled. 911 was its demise, but it was far from stellar in sales prior to that.
What did Bombardier think they were going to do differently?
Well not just Bombardier. Airbus say 6000 in that segment, Boeing have varied but midpoint is say 5200.
To come up with those numbers, even internally, some one with decades of experience has to have their name on the forecast and why.
My guess is the numbers will increase after 10 years as the current volume offering of SA will be more optimised around 200 seats and the lower end at around 70 seats will move up to around 100.
I lived in the city where an airline was based which was one of the first to indroduce the A320 in 1988. The 30 years since have just whizzed by and who would have guessed at its success- a lot depends on it being just right with its new technology.
Compare with some great turbo props indroduced in the 50s ( (Brittania), some not so good ( Electra) or some recent great 4 engined planes but the wrong layout ( 747-8, A380, A340)
Luckily the 747 -8 was at the end of its time and the A340 had a better sister.
peter the 717 is better described as a 2 class 106 seater or as Delta flies it 110.
Delta of course will be flying the Cs100 at around 100 seats too.
maybe the will also buy the bigger Cs300/A230 later as would seem likely
“But since it is too big for the regionals and too small for LCCs, it could just as easily go the MD80-717 route to oblivion.”
Regarding LCCs, the jury is still out on that.
When it comes to ordering new types of planes LCCs tend to be more risk averse. They would want to know the CSeries is here to stay at decent numbers and with a reliable delivery time.
Airbus taking over takes care of much of that.
Regarding regionals, isn’t AirBaltic (mostly) a regional? They started flying to the UAE
“Regarding regionals, isn’t AirBaltic (mostly) a regional? They started flying to the UAE”
I meant they are a regional though they’ve become less regional since receiving the CS300, for instance they started flying to the Gulf region.
A number of LCC fly A319’s, for example;
EasyJet: 91 Aircraft, 156 seats, 29″ pitch,
Spirit: 31 Aircraft, 145 seats, 28/36″.
Air Baltic is flying the CS300 in one class at 32″ pitch with 145 seats.
Legacy airlines such as AA (125) aircraft and British Airways (44) flies A319’s.
An aircraft manufacturer does not care what equipment an airline flies, it cares what they will order.
Peter, you miss something out.
-7 and 319 are shrinks – they are never as competetive cost wise as the main version and stretches. With A320 and B737 moving vom 150 Pax close to 200 Pax, and growing further to 240 Pax (A321) or 230 (B737max10), they left a huge segment behind, which was just served by what are now unefficent and not suitable planes in comparison to a well clean sheet design.
There’re 1200 B737-700 and 1500 A319s, also B717 and older MD-80 versions in this size.
The CS 100 is a nice fit in that market and is way cheaper to operate,
the CS300 as a stretch is way superior over A319 and B737-700 and even against their neo or max versions.
Actually, BBD did look somewhat captured in a death spiral – beeing late did cost a lot, lack of oders and worldwide service and marketing did cause a loose trust if BBD or the CS will survive and can be operated over a long time, and this does result in low orders, though it’s a good plane.
Low orders do lead to low scale, so unit costs stay high, and with lack of sales, service network, funds, trust, orders – there’s now way you can break out of this.
Now with Airbus in, most of these issues are solved, and now it’s a decent plane with decent support, sales etc. –
I would not be surprised if we do see plenty of orders for the CS.
Actually, for the situation the CS was in, 400 orders a rather a lot – just remember how hard Douglas did struggel when it was low on funds with sales though the MB80/90 was already a well etablished series.
The 737-700 was the same kind of shrink and Southwest bought 513. Now Southwest orders the Max8.
The “segment left behind” is not huge, and everyone is abandoning it because no one is buying. The 736 is gone, the 717 is gone, the max7 is good as dead as is the 319neo. Airbus/Boeing clear backlog in the 100-150pax market is forty units. The Cseries had to be bailed out and given away.
A/B narrowbody backlog over 150pax is 11,000 units. The market has moved.
it’s different times and a self fullfilling prophecy.
If you just offer a plane that’s less efficient than it’s bigger brothers, no wonder it won’t see sales anymore as soon as the demand makes it possible.
But now there’s a clean sheet design perfectly fitted for the 100-160 Pax market.
I don’t see that the whole 150pax thing has gone up to Max8 320neo size. It’s 30 more seats, 20% grwoth.
I’m sure CS will see a reasonable amount of sales with Airbus now, as also production cost wise Airbus will have impact.
CS is the best SA available. It was harmed by it’s poor outlook – it all changes when Airbus takes over.
Peter: The 700 was not a shrink. It was a more optimized (as much as they could) lighter built aircraft.
The -7 is a shrink.
If the 175E2 could be liberated from the US scope clauses it could pave the way for airlines to order 190E2’s as well due fleet commonality. The 195E2’s is maybe a stretch to far and suffers in certain performance categories compared to the CSA2300.
Flew in an Air Baltic CS300 end last year an 2 months ago in a Swiss CS100, the CS300 just “feels right”. Also had some good flying experiences in South America on 190E1’s.
US majors dont always own the regional they partner with and the ones they do are in separate business entity to lower costs. I dont think there is the commonality you describe.
AB needs the SA product space to go big.
That is space they can handle easier with their 35 year old platform than BA can do with its 55 year old platform and 65 year old architecture.
If AB go large — longer and heavier — with its next incarnation of the A320 family then the B797 will be significantly diminished.
It cannot cope with SA economies of scale and build rate.
It cannot go big as it would come up against a modern MD version of the A300/A330 platform which would only have to engineer a new wing box and re-heat the current NEO wing tech.
The A320 can go big because the CS500 will cover its flank.
Think we could see an evolution and integration of products. The 100-240 seat SA market (including an NMA) will see changes over the next couple of years. There are lots of expectation of an CS500 but thing it should be kept realistic, also within wing and engine limitations. The CS300 is an ~3.7m stretch of the CS100, if the CS500 is similar it might work, but shorter range of ~2500Nm that will still do for most applications, but not A320 replacement, but potentially an LLC “hero”.
CS100, 35.0m length, 110 pax (typical 2 class),
CS300, 38.7m, 130 pax, 3300Nm,
CS500, 42.7m, 150 pax (LCC175?), 2500Nm.
For comparison the A320,
37.6m, 160 pax, but LD3’s.
An 320+ the ultimate price with new CFRP wing, PW1100G2’s
~41m, 180-185 pax, 3500+Nm,
B737-8/9/10, 39.5-43.8m, 160-190 pax,
A321, 44.5m, 205 pax, 3000+Nm depending on aux tanks,
A321+, new CFRP wing, (48m?), etc. ???
If i were Airbus,
I would try to make the most out of my actually most sucessful jet – A321neo.
I like the idea of another stretch close to 50m, same size as B757-200 was. <
The issue is wing and engine combo – either you need more thurst, or a new wing with more lift. A close to 50m plane with a bigger wing and about 250pax would be a killer if it can fly on 6-8h missions fully loaded.
If Airbus can built that plane for reasonable cost (without building a new wing, maybe they can get some more out of the one they have?) it would be a awesome plane.
When, oh when, are we going to learn some good news about the ever overdue Serious Fraud Office AB indictments and “perp walks”? Inquiring minds want to know! (Maybe they’re waiting on the Farnborough show for a nice publicity “big splash”? LOL)
havent most spluttered out ( Austria) or been settled ( germany) ?
Or resigned (Airbus entire management group)
Well Leahey retired, ahhem,
Leahey’s “retirement” timing was curious…
The investigation is still going strong.
“Airbus spent hundreds of millions of euros on office buildings in Beirut, wind farms in Germany and Malaysian Formula One racing cars as inducements to buy airplanes. Investigators think they may have been bribes.”
Well I hope it all works out well for both companies. I like the look of the C series. Would love to fly in one at some time. So nice that are not depending on shoehorning us all in to skinny seats to have low costs.
As regards A210/230 prospects it is interesting that AirBaltic rushed to finalize a follow on firm order for 30 aircraft with options for another 30. The reason give was to secure delivery slots in anticipation of flurry of orders. Do they know something we don’t? Next couple of months will be ineresting.
I think most airlines would’ve wanted to wait for the Airbus take over to finalise. It’s not unlikely the CSeries will receive many orders in the next 6 months.
AirBaltic already has the CS300 in service, knows exactly what it’s getting and a follow up order is probably less complicated.
I have to think that Air Baltic had some locked in prices on options. Everyone else will wait until Airbus finishes its production/cost magic and starts offering the new lower price.
Actually, it doesn’t move the needle.
10 per month? Who cares if it’s 60 A320 and B737s?
Also it looks like Airbus is just buying a 2 plane family,
while Boeing is buying the whole civilian aircraft part of Embraer.
This contains the ERJ 145, the executive jets, the E Jets and now the E2 jets.
The E_jets with their 2-2 seating and lower range (E2 195 about 4800km) are still more like a regional airplane. Just read an article how sucessful Air Baltic is with its’ CS and flying routes like Riga – Abu Dhabi.
Overall, Embrear has a cost advantage, but in long term the CS is the most modern single aisle plane and Airbus has the strategic chance to stretch it further into a CS500.
This would be a dual threat for the Max – Airbus could shift it’s A320 lines up to A321neo and A321lr and maybe even a further A322neo (stretch), make more money and cover the B738max with a more efficent competitor.
Cs 100: 110-120
Cs 300: 150
CS 500: 180
A320 neo: 189/195
A321 neo: 220-240
A322 neo: 260-270 if stretched about 4m to 48/49m and 5 rows. Would be the same length as B757.
This should be a decen strategic idea, unload the lower end of the A320 lines to shift business to bigger and more expensive airplanes and attack Boeing in the market it earns the most money.
Becuase I have to admit, Boeing is doing well with killing Airbus in the widebodies, A380 is as dead as the B748, and the A330 neo is fighting an uphill battle, leaving Airbus with a single well selling Widebody, the A350-900.
I largely agree with your product concept, however, I wonder how AB will exactly position their 322 as it probably requires a new wing anyway. Maybe there will be a 280 pax Medium haul and a 240 pax long haul plane sharing one wing.
320 1/2 would be an ideal project for in between once the 330neo and the 35K is out.
Only point i haven t got is what is the second well selling widebody family of BC now that u day AB is left with just one?
” Boeing is buying the whole civilian aircraft part of Embraer.”
None of that makes sense. The E1 series sold 1400 in 15 years which is outstanding for a mid tier company. An new Derivative E2 is heading out of test into production on time and cost, a remarkable achievement.
What value is Boeing going to add ?
Are they to take a cut for their involvement, but knowing what they expect for an investment return doesnt mean much left for Embraer and its suppliers ( who is always forgotten build most the parts to the E series)
The whole idea of Boeing buying the existing business is lunacy, yes they can afford it with cash flow and a high share price but then what ? How do they separate the defence side of Embraer, its not like in US where Boeing bought MDD for its defence business, but was stuck with airliner side which they closed down.
Far more likely is a dual venture on a new Boeing airliner, likely to be single aisle.
No one is looking at a Boeing takeover from Brazils point of view, who have a golden share and can block any deal.
There is no advantage to Brazil for Boeing getting the existing commercial/business/defense company. Its only a future project that having Brazil makes sense
Sash: The merger is looking to break apart the business jets (other than those off the E series) from the rest of Embraer and only take up the E series.
C is two now but easily 3 latter.
Thats speculation. We had an outline of the Airbus- Bombardier agreement well before the actual close.
Boeing -Embraer has …… nothing
“The Boeing Company (NYSE: BA) and Embraer (BM&FBOVESPA: EMBR3, NYSE: ERJ) today confirmed the two companies are engaged in discussions regarding a potential combination. END OF STORY
Aviation is full of deals between companies that go nowhere. Boeing itself has a whole section devoted to developing ghost planes, they have just added some people to wind up stories about possible mergers – to rain on Airbus-Bombardiers parade.
Good luck to them. Im sure the reverse would happen if the shoe was on the other foot.
Im convinced it will be like the tariff case, when it didnt happen a huge sigh of relief as the whole idea was absurd from the beginning…yet.
No surprise to me the Embraer story took off after the tariff story collapsed. Its peoples job to make such candy floss for the punters at the County fair
How many well selling WB families does Boeing have?
Now leave out the 787-9..
If the c series is such a good idea, why didn’t Boeing and Airbus do it first?
Either it won’t sell,or just as likely ,the entire aviation business has been totally incompetent with its predictions for single aisle demand.
You should have asked Steve Jobs the same thing, if a smart phone is such a good idea why arent the existing phone behemoths doing them?
@Scott – There has been endless guessing about the future of the c-series. Lots has been written and c-series posts are usually well commented. What about running a poll on how many orders are announced at Farnborough? Correct guesses enter a draw for a one year personal subscription?
I’ll put myself down for 41-60. Farnborough may be a bit early but as a Canadian I need to keep the faith.
Great, put me down down for somewhere between 0 and 600.
Maybe – Zero. Boeing and yes Airbus conspired to keep the CSeries out of the market. Still, it has about 400 orders. There might be no orders this time around at the airshow, but after 50 to 100 or so of these news single aisle (NSA) planes, these miniature Dreamliners are flying for a half a dozen or more airlines, then boom; there could be an order explosion. It might just be da plane! that everybody has to have. But it is hard to look into the future and see it exactly.
That’s what they call playing it safe. There are potentially big orders possible but Farnborough to early I think, maybe 300 during the next 12 months?
Nice try, Jbeeko…..
This aircraft needs economies of scale / significant backlog. I don’t see Airbus production capability adding anything to that. Financial muscle yes, technology, production costs no. The aircraft has been completed already.
Well Airbus is saying otherwise:
>According to Wilhelm [Group CFO Harald Wilhelm], Airbus expects to be able to significantly reduce production and supplier costs of the C Series. “The success we have had on the Airbus A320 in continuous cost reduction will be applied to C Series. We know by heart what we need to do. We know the levers.”
If they have economies of scale they can justify contineous improvement. Not from the start on a brand new line. Unless BBD made a mess at Maribel and they now do it right in Mobile. Which seems unlikely given the time table and BBD investments.
If we believe anything executives say without understanding their agenda’s, live is full of surprises.
Priority for Airbus would be to have existing orders / LOI’s confirmed. And get an additional two respected airlines orders.
Numbers and profit are less important at this stage. The market has to be convinced.
You write :
“it is noted Embraer’s product support system is better than Bombardier’s on a stand-alone basis.”
I’m just curious as to what this means, concretely ?
Embraer has better spares locations, or leadtimes for solving AOGs, or…?
Or looking the other way around, should Bombardier seek to improve specific services (especially with Airbus behind) ?
All of the above, Goldfinger. You know Operation Grand Slam simply won’t work.
I expected you to talk, Mister Hamilton !
More seriously, after-sale services seem to be the new trend these days. Lots of talk about market values in the hundreds of B$.
Yet while I have heard much about cutting supplier/production costs of the C-Series, I had never heard anything about its product support aspect, until this little sentence of yours.
So I’m just wondering what this might mean wrt the strategy for C-Series within the wider Airbus environment.
Airbus criticism in the early days of BBD and C Series included poor product support. Also the industry would complain from time-to-time. Q400 was a particular target of criticism.
It will be interesting how the CS-family will fit into the US Mainline and Regional airlines. Republic Airways provides services to the US big 3’s regional brands with mainly E170/175’s, they also have 40 CS300’s on order, Delta went mainline with their CS100’s.
One of the big questions for me is what AA, DL and UAL’s approach will be replacing their ageing fleets of A319’s, 125, 57 and 67 respectively. DL also still operates ~90 B717’s. Definitely potential out their to keep an CS/A200 FAL at Mobile busy.
Could we see an CS vs E2 scenario in the same way as that what is playing off between the 787 vs 330NEO?
The 40 Republic CS300s are viewed as an “iffy” order, if not outright canceled. As far as CS vs E2, Boeing sure as heck thinks so, but the CS beats the E2 two out of E2’s three lengths.
Think someone like United could “take-over” the order from Republic and hence secure earlier slots?
Anecdotal evidence Republic delivery slots are for a new US start-up called Moxy Airlines.
Apologies, totally off topic but found this article on the T1000 and PW1100G problems very useful and good reading for a novice like me.
This just published; also a good read one engines.