Bombardier seeks buyers for new jet
By Bernard Simon in Toronto and Kevin Done in London
Financial Times
Published: March 16 2005 02:00 | Last updated: March 16 2005 02:00
Bombardier, the Montreal-based transport equipment maker, has moved a step closer to building a new series of passenger aircraft with financial support from the UK and Canadian governments.
Bombardier's board authorised management yesterday to seek customers for the C-series aircraft, which would come in two sizes seating 110 and 130 passengers, each with a short- and long-range version. The latter would have a range of 3,000 miles.
Bombardier edged up slightly in Toronto after the news. But shares of Embraer, the Brazilian aircraft maker which leads in this segment of the market, fell about 5 per cent on the prospect of a new competitor. Henrique Rzenezinski, Embraer's vice-president for international affairs, warned that Brazil could file a complaint with the World Trade Organisation in the event it finds evidence of a Canadian government subsidy in the C-series programme.
Bombardier plans to sell the aircraft to leading airlines, rather than the commuter carriers which have dominated orders for Bombardier's CRJ regional jets, seating between 50 and 90 passengers. Gary Scott, the former leader of Boeing's 737 division who heads the Bombardier project, said that "the airlines have been very excited about our new offering; we believe we can capture a significant share of this market".
The total cost of the project is estimated at $2.1bn, split equally between the company, government loans and supplier contributions. About 400 Bombardier workers and 150 supplier employees are assigned to the project.
Pierre Beaudoin, president of Bombardier Aerospace, said negotiations were under way with authorities in the UK and Canada "with a view to having them both participate".
The most likely outcome, according to analysts, is that the aircraft's wings will be assembled at Bombardier's plant in Belfast, Northern Ireland, with final assembly taking place in Montreal. Bombardier also has plants in Toronto and Wichita, Kansas. Mr Beaudoin said that wing assembly and final assembly would each create about 2,500 jobs.
Bombardier's project is one of the few all-new commercial jet programmes besides the A380 superjumbo and the 787 Dreamliner mid- market aircraft being developed by Airbus and Boeing respectively. The new aircraft would take Bombardier into direct competition with Airbus and Boeing at the bottom of their ranges with their A318 and 737-600 models.
Mr Scott said airlines' preference to confine their fleets to a single manufacturer was an issue but that, with a projected 15 per cent improvement in cash operating costs, "our advantage is anything but marginal".




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