History of the program
Airbus recently paid one Canadian dollar for a 50.01% stake in Bombardier’s CSeries. This paper examines the addressable market for the aircraft.
Entry into service was not smooth for the CSeries with various reports of overrunning costs. However, some financial assistance from the Canadian government and two landmark orders from Delta for 75 aircraft and from Air Canada for 45 aircraft, secured the immediate future of the program.
Today, both the CS100 and the CS300 variants are now in service with launch customers Swiss (CS100) and Air Baltic (CS300). Swiss has now also accepted the larger CS300 variant into its fleet.
Further challenges followed. Despite the reprieve of those large orders, Embraer challenged the support afforded to Bombardier by its home government as anti-competitive and sought to challenge Bombardier through the WTO.
More recently, the US Department of Commerce (DoC) has levied a tariff on the import of the CSeries aircraft, essentially tripling its price, again citing anti-competitive practice in relation to pricing.
The decision surprised many, including Delta Air Lines, the CSeries’ biggest customer. On one hand the DoC was protecting Boeing, but only to hurt one of its major carriers. Delta Chief Exec, Ed Bastion, was clear on Delta’s stance, refusing to pay the tariff.
In what many are calling a coup, Airbus took control of the CSeries program and committed to build the aircraft at its Alabama plant to potentially swerve the tariffs. Others might argue Boeing is still the long term winner assuming it will still only face one competitor in the sub 140 seat market as Airbus is unlikely to support two aircraft.
Putting aside any competitive manoeuvring, just what is the market for the CSeries and how will the Airbus deal increase sales. To read IBA’s take on the matter click the link below.Download PDF