The Business case for the Bombardier CSeries

The business case for the Bombardier CSeries is sound. Although Bombardier is pursuing a narrow market segment, 100-149-seats, this is hardly an inconsequential market. There is an estimated market of more than 6,000 aircraft over 20 years, accounting for traffic growth and retirements/replacements. Airbus and Boeing are trending toward up-gauging their airplanes, which means largely abandoning this market segment to new competitors such as Bombardier and Embraer and potentially AVIC, Mitsubishi and Sukhoi.

Skeptics have questioned the CSeries business case for a variety of reasons and assertions:

• The 100-149-seat market is a dying market;
• Bombardier has no experience in this segment;
• The CSeries has few orders;
• The CSeries has had false starts;
• The CSeries 2x3 seating is a mistake;
• The CSeries doesn’t have the range of the A319 and 737-700;
• Bombardier has no experience in working with advanced materials;
• Airbus and Boeing can under-price the CSeries with their A319 and 737-700; and
• The A320 family New Engine Option will destroy the business case for the CSeries.

Some of these items are indeed cause for skepticism. Others are pure hyperbole aimed at undermining the CSeries at the behest of competitors and uninformed or biased observers.

Proponents of the CSeries have highlighted its advantages:

• 15% lower cash operating costs;
• 20% lower fuel burn than 737-700 and A319;
• 20% lower maintenance costs;
• Significant improvements in emissions;
• Significant improvements in noise;
• Utilization of advanced materials and 21st century technology; and
• The first new technology narrow-body trunk liner since 1988.

It is clear that the CSeries is projected to be the most efficient aircraft in its class when introduced in 2013. The key question is can Bombardier deliver on these promises.

We will address these and other issues in this new Study. Our conclusions will be questioned and criticized by some, but there are two points to be made that are irrefutable and which, in our judgment, demonstrate beyond any doubt that the business case for the CSeries is sound and that Airbus and Boeing don’t doubt it.