The future of Bombardier Aerospace’s commercial airline business might well hinge on what becomes of the product starting to take shape at the company’s new manufacturing complex at Mirabel near Montreal, Canada, dedicated to the C Series airliner. Work formally began in September with an official ground-breaking ceremony, when the company launched the first of five phases of construction known as the complete Integrated Aircraft Systems Test Area (CIASTA)–a testing and proving facility that will house a “virtual” C Series test aircraft designed to assess systems for reliability and functionality a full year before the first prototype flies.
Once complete, CIASTA will house the C Series Integrated Systems Test and Certification Rig (ISTCR)–the so-called “iron bird.” This is intended to facilitate early product maturity by testing flight control systems, avionics, electrical and environmental controls. Other test articles planned for the building include an interiors rig, a systems integration test stand and engineering simulator, and flight controls integration lab.
Bombardier Aerospace president and COO Guy Hachey called the ground-breaking a “red-letter” day for the C Series program. “Some of you might be surprised to see us investing so much in the area of commercial aviation,” he said, referring to the roughly $3 billion the company has committed to the project. “But we must not be misled by the fits and starts of the economy. In the aerospace industry, we must work with timelines that cover the next 15 to 20 years. And, for the long term, the prospects for commercial aviation are extremely positive.”
Bombardier expects to receive another C Series order before year-end from the 110- to 145-seat sector of the airliner market, adding to the two customers that have so far committed to a total of 50 firm orders. Launched on the strength of a letter of interest from Lufthansa during the 2008 Farnborough airshow, the program has since seen the airline convert its LOI to a firm order of 30 CS100s and Dublin-based Lease Corporation International place another firm order for 17 CS300s and three CS100s.
“We believe we are now at the bottom; basically, we’re bouncing off the bottom. It’s not going [further] down either in the business aircraft or the commercial aircraft segment,” said Hachey. “But we expect in the next three or four quarters, maybe the next two or three quarters, things to start picking up.”
Certification Set for 2013
The C Series is scheduled for certification in 2013 and the program moved into its joint definition phase in March, at which point Bombardier began collocating suppliers at its C Series product development center in Montreal. The OEM has signed contracts and confirmed 98 percent of the suppliers for the C Series. Some 1,000 Bombardier employees and another 350 supplier personnel now work together in the Montreal facility.
Bombardier’s Plant 1 will serve as the site of cockpit and aft fuselage production, while the company’s plant at Belfast, Northern Ireland, takes responsibility for the wings and composite structures. China’s Shenyang Aircraft Co. (SAC) has agreed to supply the center fuselage.
Fuselage Testing To Begin
In August, SAC delivered the an aluminum-lithium C Series test barrel to Bombardier’s St. Laurent plant, where workers loaded the fuselage section onto a rig so pressure and torsion testing can begin next month. Over the next two months, workers plan to install more than 300 sensors on the barrel, then begin some two years of testing designed to simulate 180,000 operational cycles.
Plans call for Bombardier to test all flight commands, avionic circuits, electrical circuits and climate controls at the new Mirabel facility–an important advantage, according to vice president of commercial aircraft programs Ben Boehm, “because we will be able to identify potential problems related to the use of new state-of-the-art technology and the implementation of new advanced processes and thus be able to provide solutions.” Bombardier also plans to conduct most of the 1,800 hours of its program’s planned flight testing at the Mirabel site. Eventually, the OEM plans to erect a complex of buildings, standing adjacent to its existing CRJ assembly hall in Mirabel, which will total 860,000 sq ft in area.
Notwithstanding the lukewarm sales response the C Series has so far generated, Boehm noted that the program, if it does draw the anticipated additional orders this year that the company expects, will have collected as many sales as the Boeing 787 did at around the same period in its development. “When we first started into this segment, a lot of people said, ‘Well, you’re getting into the Bermuda triangle of airplanes,’” said Boehm. “But we keep reminding people that there are over five thousand 100- to 149-seaters out there flying today that most airlines love. At Northwest Airlines there are [DC-9] fuselages that are over 30 years old.”
However, new technology will allow the C Series to meet today’s environmental needs, as well as provide transcontinental range not available with DC-9s, for example. Meanwhile, the 110-seat CS100 is intended to deliver a 16- to 17-percent cash operating cost advantage over the Embraer E195, Airbus A318 or Boeing 737-600 with winglets, while CS300 will offer the same edge over an A319 or 737-700 with winglets. Bombardier advertises a 20-percent fuel burn improvement over those airplanes, and the C Series represents a 70-percent improvement on the DC-9.
It now appears that potential customers for the next-generation single-aisle airplanes from Boeing and Airbus will have to wait more than a decade for similar cost-basis improvements to those Bombardier has promised for the C Series. This could give the Canadian company a six- or seven-year head start in any direct competition between its product and the presumed A320/B737 replacements.
“The question really is, ‘Where is their design point going to be?’” said Boehm. “All the indications would point to the next-generation replacement of their narrowbody needs to actually get bigger, otherwise they’ll have a [product] gap… Their design point is already somewhere between 150 and 160 seats. So, as a bare minimum, I doubt they will ever make their design points smaller.”
Boehm acknowledged, however, that Bombardier may face a disadvantage in both the industry perception that paints it as a small-aircraft manufacturer. “It is a bit of a hurdle that we have to [face] to move into the mainline market to compete a little bit more closely with Boeing and Airbus,” he admitted. “But we’ve dealt with Lufthansa, we’ve dealt with the Northwests [the U.S. long-haul operator Northwest Airlines] in the past. But having said that, yes, moving into the mainline market, there are a few adjustments we need to make, but it’s not something utterly brand-new to Bombardier.”
However, he wouldn’t accept the idea that Bombardier needs to overly concern itself with the pricing power Boeing and Airbus might bring to bear on shrunken variants of its replacement narrowbodies. “This is a market-based pricing situation. It’s not one where there’s some magic formula, where you step into this other world with different pricing,” said Boehm. “I would agree that Boeing and Airbus can sometimes leverage deals–for example, a 747 deal with a narrowbody deal. But more and more nowadays you’ll find that the interactions with the airlines in these economic situations…are about the right airplane and not about, ‘Let’s fire-sale buy this airplane.’ Airlines that have tried doing that in the past are the ones that have gotten caught.”
Bombardier plans to hire roughly another 300 engineers for the C Series program by next summer, according to Hachey. The company expects that by 2017 the C Series will employ some 3,500 workers worldwide.
In two separate rounds of cuts, Bombardier this year laid off some 4,360 employees due to the slump in business jet orders. Depending on how well its CRJ line weathers the commercial airliner sales drought, Hachey said it might need to resort to more layoffs at its regional jet production line in Mirabel, where the CRJ700, CRJ900 and CRJ1000 undergo final assembly.
Hachey also said much would depend on the success or lack thereof of several sales campaigns, one of which appeared to end positively in September with an LOI from American Airlines covering the conversion of an option for 22 CRJ700s. Under the terms of the deal, Bombardier expects to start delivering the new airplanes–equipped with dual-class cabins–to American’s Eagle regional subsidiary some time near the middle of next year.
The deal came not long after Bombardier suffered the cancellation of an order for 15 CRJ1000s held by Italy’s MyAir, which lost its operating certificate due to financial troubles. The OEM also awaited a decision by the Supreme Court of Canada on a $1 billion claim by Kuwait Airways against Iraq. The case had delayed delivery of nine of 10 CRJ900s to Iraqi Airways, which Kuwait wants to hold liable for damages it suffered during the first Gulf War.