AirKarp

A United Airlines CSeries order could be breakthrough Bombardier needs

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CSeries sales are stuck at 243 firm orders.

Bombardier executives were rightly exuberant over Transport Canada’s certification of the CS100, a significant milestone not just for the CSeries program but for Canadian aerospace. The performance metrics Bombardier is reporting from CSeries flight testing are impressive, but to make genuine progress on the CSeries program, Bombardier needs a big order.

“When I’m sitting across from a [potential airline] customer, I now have a certified aircraft,” Bombardier Commercial Aircraft president and CEO Fred Cromer said following certification, adding that the CSeries is “starting to resonate” with airlines. “We will turn that interest into sales,” he said.

CSeries sales are stuck at 243 firm orders, and Bombardier is in desperate need of a splashy order for its foray into the narrowbody airliner sector.

United Airlines presents a major opportunity. The Chicago-based airline has signaled it could soon place an order for as many as 50 aircraft in the 100-seat size range. Some have suggested that United could go with an Airbus A319neo or a Boeing 737 MAX 7. United executives say they’re exploring all options, but the impression I get is that those aircraft are too large for what United is looking for.

United wants to become “more dependent on mainline [flying] and less dependent on [contracted] regional [flying]” in its domestic network, vice chairman and chief revenue officer Jim Compton said when I visited United’s headquarters earlier this month, citing, among other issues, US regional carriers’ problems hiring new pilots. “There are [domestic United] markets where a 100-seat aircraft would fit very well,” Compton said.

United’s most logical options are the CS100 and the Embraer E190-E2. On the plus side for Embraer: United really likes the way the 76-seat E175 is performing in its network. In fact, according to United VP-network Brian Znotins, the E175 has a higher level of passenger satisfaction than United’s 737 and A320 mainline domestic aircraft.

United acting CEO Brett Hart told me, “The E175 has been a terrific aircraft for us. It provides a very good experience for our customers. We recognize that. We would expect that, if we went to a 100-seat aircraft, we would get that level of satisfaction.”

The E190-E2 and CSeries are both powered exclusively by Pratt & Whitney geared turbofan (GTF) engines, so no advantage there for either aircraft. The CSeries is a bit larger. Delta Air Lines plans to configure the E190s it is putting in its mainline fleet with 98 seats and United’s configuration would probably be similar. With the CSeries, it could likely seat 110 passengers.

Obviously, price will be a huge issue in this decision. United has a lot of leverage. An order from a major US airline for as many as 50 CS100s or E190-E2s to place into mainline service would be a significant win for Bombardier or Embraer.

This may turn into a limbo contest: How low will they go? Steven Udvar-Hazy has been publicly advising Bombardier for some time to do whatever is necessary from a pricing standpoint to secure a signature order for the CSeries—would Bombardier be willing to essentially give the aircraft to United?

One caveat: Could Boeing or Airbus, in order to block Bombardier from breaking through with United, be willing to offer a sweet deal on 737 MAX 7s or A319neos? I mentioned those aircraft are larger than what United is looking for, but if the price is right—and if those aircraft are coupled with other Boeing or Airbus aircraft—could that be sufficient to scuttle a United-Bombardier CSeries deal?

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