DECEMBER 2017 AUSTRALIAN AVIATION 67MY ENEMY’S ENEMY
customer support network. On the
other hand, because they have such an
impressive order book, we will also
benefit from a procurement standpoint.
Simply put, we will gain more volume,
while reducing production cost.”
Airbus’s scale also includes home-
ground advantage in a number of
markets, not least because it has final
assembly lines or major manufacturing
hubs in France, Germany, China,
the US, Spain and the UK. With the
C Series acquisition it will now add
Canada to that list. Many of Boeing’s
objections to the C Series as a foreign
interloper – however spurious and
protectionist they may seem to some
observers – are mitigated to some
degree by Airbus’s decision to base
at least some C Series assembly in its
Mobile, Alabama facility.
It is indeed an unexpected twist
of fate that Mobile should be the
key winner out of Boeing’s trade
fracas with Bombardier, although
Bombardier’s Cognard confirmed to
Australian Aviation that “the Mobile
line will be dedicated to the aircraft for
US airlines.”
Airbus’s sheer weight will also be a
plus for the C Series. To start with, the
A320neo and C Series programs can
work together on supplier negotiations,
although it must be stated that neither
of the programs has distinguished itself
on this front, whether with managing
engine makers or interiors suppliers.
The argument that the combination of
the world’s largest airliner program
with one of the smallest will be
the proverbial straw that breaks the
supplier camels’ backs is not entirely
convincing.
The personalities involved, however,
may be. Longtime Airbus sales chief
John Leahy, he of the “cute little
airplane” jibe about the C Series,
announced his retirement at this year’s
Paris Airshow, and he will be keen
to go out with a bang, whatever the
eventual date of his departure ends up
being. A series of large orders for the
C Series, either in conjunction with
other Airbus products or not, would be
the capstone to Leahy’s career.
His successor – whoever that
may be, now that erstwhile anointed
successor Kiran Rao has ruled himself
out and the airframer is looking
externally – will be keen to establish
themself in Leahy’s shoes, leading to
more impetus for sales. Airbus has
certainly never been shy of making big
deals to make a big splash, so look for
news at the regional airshows leading
up to Farnborough 2018, such as an
order from Egyptair at the Dubai show
for 12 CS300 plus options for 12 more.The crux is how the rest of the market
settles
“This partnership has no impact on our
Q400 and CRJ programs,” Bombardier’s
Cognard insists. “We remain committed
to both programs and we are driving
their transformation. We have recently
gained more traction for our regional
aircraft. There was a lull in the market,
but things are picking up and the
recent order from Spice Jet for up to 50
Q400s signals that there is a need for
higher-performing and larger turboprops
like ours. As for the CRJ, we have
launched the new Atmosphere cabin and
it will be the norm for all our deliveries
starting in the second quarter of 2018.”
The key question is, of course,
what the angle is for Bombardier to
remain involved in the commercial
aircraft market, and indeed Airbus’s
acquisition of the C Series may well
be the first step in Bombardier cutting
its commercial ties. It’s not beyond the
realms of possibility that COMAC sees
value in the Q400 program, nor that
there is some residual value left in the
CRJ, which feels very long in the tooth.
It’s also unclear how closer working
between Airbus and Bombardier will
affect the turboprop market, given that
Airbus is a half owner of the Q400’s
principal competitor, ATR.Could a gap in the market here spur
the introduction of a new competitor,
despite much writing on many walls in
many languages about the margins in
the commercial aircraft business?
The response from Boeing,
and indeed Bombardier’s primary
competitor Embraer, will also be
key. The two companies have worked
together in the past, including on the
KC-390 medium airlifter and on other
similarly-sized ventures that have yet to
be revealed publicly.
Indeed, part of Delta Air Lines’
objection to the Boeing trade dispute
was that Boeing’s inadequate response
to its request for proposals were smaller
Embraer E-Jets. Will Embraer launch
a further stretch of the E-Jet program
to compete with the lower end of the
C Series and to bridge the gap to the
737 MAX 7? Will Boeing launch a 737
MAX 6.5? Will Mitsubishi’s MRJ get
involved somehow?
None of these options seems
particularly compelling, but
partnerships can often spur unexpected
developments.
Chinese and Russian airframers,
too, will be watching the situation
closely. The fledgling MC-21, C919,
ARJ21 and indeed the CR929 are likely
to benefit, albeit slightly, from even
the perception of fewer players in the
market. Airbus’s acquisition of the
C Series – “acqui-hire” or not – may
feel like a loss given the numerous
rumours of a Chinese takeover, but
these players are in it for the long haul,
and may gain a greater overall benefit
from developing their own fixes to
overcome the hurdles they currently
face.
All eyes will be on the wedding
plans during the period of the Airbus-
Bombardier engagement to see if
ardours are cooling, feet are getting
cold, or whether the attraction remains
as mutual as it now seems.Simply put,
we will
gain more
volume, while
reducing
production
costs.
FRANÇOIS COGNARDEnsuring a future for the
C Series’ spacious cabin is a big
#PaxEx plus.JOHN WALTONThe C Series has been in airline service
for over a year now.ROB FINLAYSON