AirInsight Publishes Study, “Business Case for the Bombardier CSeries”

AirInsight today issued a study, “The Business Case for the Bombardier CSeries,” that provides an in-depth analysis of the Canadian company’s leap into mainline jet manufacturing.

Bombardier is the world’s third largest aircraft manufacturer, after Airbus and Boeing, and is the leader in regional jet and turboprop aircraft seating 50-100 passengers. The CSeries, with seating from 100-149 passengers, puts Bombardier in competition for the first time with Airbus and Boeing and their A318/A319 and 737-600/700 aircraft.

AirInsight’s new study is a follow-on to a report it did in December 2009, “The Coming Narrow-Body Re-Engining Programs for the A320 and 737NG Families.” The 2009 report was a 16-page look at the prospective re-engining programs. The new study began as an update to this report but evolved into an in-depth study of the entire business case for the CSeries, which has been questioned by some—including Airbus, which claims that with the launch of the A320neo (New Engine Option), there is no business case for the CSeries.

AirInsight’s new study concludes quite the contrary. Among its findings:

• By their current competitive responses, Airbus and Boeing validate the business case for the CSeries;
• The CSeries has a superior cash operating cost advantage over the current A318 and A319, retains significant advantage over the A319neo (the A318 won’t be re-engined) and compares favorably with the A320neo;
• The CSeries has a superior cash operating cost advantage over the Boeing 737-600 (none has been sold since 2005) and the 737-700 and compares favorably with the 737-800;
• The NEO program provides Airbus with economic advantages over the 737NG;
• The CSeries has a superior cash operating cost advantage over the Embraer E190-195 jets;
• The 100-149 seat market, while representing only 25% of the total single aisle market forecast by Airbus and Boeing over the next 20 years, is significant and worth pursuing;
• Airbus and Boeing are up-gauging airplanes in their future forecasts and will either have to abandon the 100-149 seat market or develop two airplane types to cover the 100-240 seat market identified in their forecasts;
• Airbus faces a greater threat from the CSeries than Boeing and has greater incentive to “kill” the CSeries in its infancy;
• Boeing is not blind to the threat the CSeries offers to its single-aisle product line now and in the future;
• The CSeries in a 150-seat CS500 and the current 130-seat CS300 can replace 175 Boeing 737 Classics and 86 Boeing 717s at Southwest Airlines/AirTran and save Southwest hundreds of millions of dollars before Boeing could respond with a new airplane;
• Bombardier should develop the CS500 variant; and
• The Pratt & Whitney P1000G Geared Turbo Fan powering the CSeries (and Airbus NEO program) has the ability to further cut fuel consumption dramatically by 2020 (when Boeing currently is talking about a new airplane) and 2027 (when Airbus is currently talking about a new airplane), pre-empting the prospect of a more complete open rotor engine concept.

AirInsight completed the 70-page study over three months, taking into account information obtained in the public domain, through its own research and from the manufacturers of the airframes and engines. Information included historical data, interviews and statements made by Airbus, Boeing, Bombardier, CFM International, Embraer, Pratt & Whitney during 2010, including at the Farnborough Air Show and up to and through the December 1, 2010, announcement by Airbus of its NEO program. AirInsight also pursued its own interviews with industry officials and resources.

“The CSeries retains a double-digit advantage in operating costs over the competing A319neo on both an aircraft-mile and seat-mile basis, as an all new technology aircraft is superior to a compromise of new engines on an older airframe.” said Ernest S. Arvai, a co-author of the report. “The CS300 even beats the larger A320neo in cost per seat mile, as well as the 737-800.””

Addison Schonland, a co-author of the report, noted that “The CSeries appears to be environmentally friendly for communities, economically friendly for airlines, and a step-change for the industry.”

AirInsight performed its own economic analysis of the A318/A319, 737-600/700, CSeries and Boeing MD-80 series and reached its own conclusions independently of any other studies, analysis, company or resource.

Copies of the study may be purchased via the AirInsight’s Report Library.

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