Bombardier prepares to take on Airbus and Boeing
- 12 July 2012
- From the section Business
They call them "paper planes", and Guy Hachey is not happy about it.
"We haven't flown yet, so we're faced with all this scepticism," laments the president and chief operating officer of the Canadian aeroplane maker Bombardier.
"They say we're gonna be late like Boeing, late like Airbus, late like everybody else."
Bombardier has spent some four years and 3.5bn Canadian dollars ($3.4bn; £2.2bn) developing its CSeries family of aeroplanes, targeting a segment of the market that Mr Hachey describes as "untapped and underserved", namely that for aircraft that seat 100-149 passengers.
"Once we fly at the end of this year, I think we'll see people say 'these guys are on track, they're not going to be missing by years'."
So far, this market segment has been served by small versions - so-called "shrinks" - of Airbus and Boeing's best-selling A320 and 737 aircraft families, as well as by the E-195, a stretched regional jet made by Brazil's Embraer.
Neither "a shrink", which is heavier than it ought to be and thus takes a penalty in terms of economics, or "a stretch", which suffers from reduced range, will be as efficient as a plane designed specifically for the segment, Mr Hachey insists.
And for the time being - indeed, probably for decades still - Bombardier is the only one designing aeroplanes dedicated to serve this market segment, he declares.
"No-one's optimising an aircraft in this segment," he says. "We're the only one."
The CSeries will deliver a 20% reduction in fuel consumption and emissions when compared with the A319 and 737-700 machines Boeing and Airbus currently fly, according to Mr Hachey.
Only problem is, Bombardier's plane has yet to fly. In fact, they have not even finished building it.
Arch rivals Airbus and Boeing's planes, meanwhile, have been around for a couple of decades.
In the worlds of hi-fi, or fridges, or cars, their age would have rendered them obsolete. In the world of aviation, their age means they have earned their spurs; that they are proven entities that work.
Not only are the planes from "Teams A & B" proven, however. They are also being improved.
Both companies are currently taking orders for aircraft in the A320 and 737 families that are to be kitted out with modern, more fuel efficient engines.
Though even then, Bombardier's CSeries will be better, Mr Hachey says.
"Even with the re-engine, we have a 12% advantage," he says.
As such, Airbus and Boeing's supposed "reaction to an aeroplane that was changing the rules, being substantially more efficient from a fuel efficiency standpoint" has fallen far short of requirements, Mr Hachey believes.
"We beat the pants off them in terms of fuel efficiency," he grins.
It is a claim that has won over some 13 customers - both airlines and leasing companies. Between them they have placed more than 350 orders for the aeroplane.
"The first three years of production are already sold," Mr Hachey says. "We're on track."
Only 138 of those are firm orders, however, and many in the aviation industry feel it has taken Bombardier an unduly long time to firm up the rest.
What, they ask, appears to be the problem? Perhaps the plane is not as good as Bombardier says it is?
One aeroplane buyer, who works for an airline that has been eyeing the CSeries since the start of the project, insists Bombardier needs to learn to sell the way Airbus and Boeing do.
But Mr Hachey just laughs.
"We don't give them away," he says. "We know how to sell, but we're expected to give such large discounts. That's code, what he told you."
First flights of the CSeries are scheduled for the end of 2012, and that should see the customers flocking in, Mr Hachey predicts.
Hence, by the end of 2013, he expects to have landed the 300 firm orders for the plane that Bombardier says it will need before it will enter production. By then, the customer base should also have risen from the current 13 to between 20 and 30 airlines and lessors, he says.
"I think we'll see quite a movement in the customer base," he says.
David and Goliath
Bullish talk by the president has done little to mollify those who have already signed on the dotted line, however. Several CSeries customers have voiced concerns in recent weeks about Bombardier's snail-paced order build-up.
They take it as a sign that their rivals remain unconvinced the CSeries is a viable proposition, and they fear that concern about the plane maker's capability could damage both its and their own brands.
The fact that Airbus and Boeing are raking in multi-billion dollar orders for their re-engined A320neo and 737 Max upsets them further.
But to Mr Hachey, none of this is surprising.
"We're a start-up in this segment, so it's pretty normal that we would have some challenges in selling this plane," he says.
"Of course Airbus and Boeing are reacting with price. Of course the duopoly is trying to keep us out. I would do the same thing.
"They'll do everything to keep a third player from coming in, even at the low end, even though we're not competing with the real products that they have. They don't want a third player."