Canada unveils new jet to take on Boeing and Airbus

Bombardier, based in Montreal, is the world's fourth-largest plane maker, behind Boeing, Airbus and Brazil's Embraer. Its hangar includes regional jets and propeller planes, as well as a range of executive aircraft.

It formally unveiled its newest plane after a glitzy multimedia presentation at its Mirabel facility near Montreal, lifting a large screen to reveal one of the aircraft.

Bathed in blue light, the white and olive-gray jet had a red-orange and white nose, its two Pratt & Whitney engines spinning gently.

"It's not a paper airplane, it's a real airplane," Arcamone said. "It's not a re-engined aircraft we are putting into the market ... I can tell you we are a very serious contender."

The company said it was transitioning to flight testing ahead of a first flight scheduled by the end of June.

At list prices, the 110-seat CS100 costs $US62 million and the 130-seat CS300 costs $US71 million. In contrast, the Boeing 737 MAX costs $US82 million and Airbus' A319 NEO costs $US88.8 million.

Latvia-based airBaltic is one of the first customers to purchase a higher-density 148-seat version of the plane, the company said.

Bombardier said it would also offer a CS300 with an option for up to 160 seats, either as an initial order or as a retrofitted plane.

LURING CUSTOMERS

A big buyer is Germany's Deutsche Lufthansa, the first airline to put in a firm order. Lufthansa Executive Vice President Nico Buchholz was present at the event, along with executives from Swiss International Air Lines and Republic Airways.

Bombardier said executives from about 15 customers and potential customers attended the event, though most asked the planemaker to keep their anonymity.

Its book currently stands at 148 firm orders, excluding a commitment for 32 CS300 jets by Russia's Ilyushin Finance Co. That order is awaiting shareholder approval, which is expected to go through sometime this month.

That compares with 1064 orders for Boeing's competing 737 MAX and more than 1440 for Airbus' NEO family, although only a small fraction of those orders is for the smaller models that compete directly with the CSeries.

Arcamone, noting it already has 14 customers, was adamant that Bombardier would meet its target of 300 firm orders and at least 20 customers by mid-2014, when the jet enters service.

DISCOUNTING

Bombardier's slowly growing order book has raised concerns that the company does not have the appetite to lure customers with deep discounts, as Boeing and Airbus do, or provide financing offers and walk-away rights.

"We've had some customers that we did offer launch pricing as our competition's done, which is the industry norm. It makes economic sense," said Arcamone.

The CSeries claims a 15 per cent cash operating cost advantage and 20 percent fuel burn advantage over the Boeing and Airbus models. Its airframe is lighter.

The plane uses conventional batteries rather than the lithium ion batteries that have caused troubles for Boeing's Dreamliner plane. "We are very glad about that decision," Arcamone said.

Airbus and Boeing have moved to defend their strong market shares by adding fuel-saving engines similar to those on the CSeries to their own best-selling models.

That is a draw for airlines preferring to stick with existing suppliers, whose planes pilots are already certified to fly and where spare parts are plentiful. Numerous repair stations are already qualified to service the competing jets.

Bombardier, which says it expects orders for the CSeries to pick up once the aircraft has made its maiden flight, has an ambitious launch schedule, analysts say, with little room for error.

Reuters