Delta says Bombardier's CSeries 'fits a need' but technology level has pushed up cost

MONTREAL -- Bombardier may be struggling to sell its CSeries planes because of the high level of technology in the new narrowbody aircraft, the head of Delta Air Lines said Tuesday.

See Full Article

"It's highly engineered, which I think has been some of the challenges they've faced in marketing it, getting to a price point to get paid for that engineering," president Ed Bastian told analysts at the J.P. Morgan Aviation, Transportation & Industrials Conference webcast from New York City.

"But it's an aircraft that we think and we believe can make a big difference for the industry."

Delta is looking for a replacement for its aging small narrowbody fleet, including about 120 McDonnell Douglas MD-180s that are expected to retire over the next five years or so.

While the CSeries "fits a need," Bastian said price is a factor in whether the large Atlanta-based carrier places an order for the 110- to 160-seat plane that is set to enter into service by summer. Executives toured the CSeries in December.

Air Canada CEO Calin Rovinescu also told the conference that price was a big factor in the Montreal carrier's recent decision to sign a letter of intent that includes a firm order for 45 of the larger CS300 planes, plus options for 30 more aircraft.

"We obtained a good deal," he said. The airline has refused to disclose the purchase price, which analysts believe includes a deep discount off list prices.

The planes are scheduled to be introduced beginning in late 2019 or early 2020 once deliveries of Boeing 737 MAX planes wind down. The larger Bombardier (TSX:BBD.B) CSeries will replace 25 Embraer E-190s before they require costly maintenance overhauls.

However, Rovinescu said the airline is able to delay deliveries for new planes if market conditions at the time are weaker than forecast.

The CSeries has received commitments for 678 planes, including 243 firm orders.



Advertisements

Latest Economic News

  • CIBC looks to generate quarter of earnings from U.S.

    Economic CBC News
    CIBC closed its acquisition of Chicago-based PrivateBancorp on Friday, securing its foothold in the U.S. where CEO Victor Dodig said the bank hopes to one day generate a quarter of its earnings. The Canadian bank now earns roughly five per cent of its profits in the U.S. Source
  • CIBC closes acquisition of U.S.-based PrivateBancorp

    Economic CTV News
    TORONTO -- CIBC closed its acquisition of Chicago-based PrivateBancorp on Friday, securing its foothold in the U.S. where CEO Victor Dodig said the bank hopes to one day generate a quarter of its earnings. The Canadian bank (TSX:CM) now earns roughly five per cent of its profits in the U.S. Source
  • Consumer demand for debt as high as it has ever been, Equifax says

    Economic CBC News
    Canadians' appetite for debt is as insatiable as ever, a new report from credit monitoring firm Equifax says. Equifax calculates that Canadian consumers owed $1.729 trillion at the end of the first quarter, an increase of 6.9 per cent in a year. Source
  • Sears Canada store closures expected to have little impact on RioCan

    Economic CTV News
    NEW YORK -- Sears is closing another 20 stores as the ailing retailer tries to turn around its business. Real estate investment trust Seritage, which owns the 20 real estate properties, confirmed the closings-- 18 Sears stores and two Kmart stores -- in a government filing Friday. Source
  • Ontario rent increases capped at 1.8 per cent next year

    Economic CTV News
    TORONTO - Landlords in Ontario will be able to increase rents up to 1.8 per cent next year, as rent controls are expanded under the Liberal government's housing plan. The annual rent increase guideline is the maximum amount a landlord can boost a tenant's rent without needing the approval of the Landlord and Tenant Board. Source
  • Norsat International investors approve takeover bid from Chinese firm

    Economic CBC News
    ?Norsat International Inc. says its securityholders have voted to approve a controversial takeover of the company by Chinese company Hytera Communications Co. Ltd. The Canadian satellite communications firm says its securityholders voted 72.53 per cent in favour of the offer of $11.50 US per share. Source
  • Cost of Muskrat Falls hydro project rises by another billion, CEO says

    Economic CTV News
    ST. JOHN'S, N.L. -- Costs for the beleaguered Muskrat Falls hydro development in Labrador are up by another $1 billion. Nalcor Energy CEO Stan Marshall says the new price tag is $12.7 billion with financing. Source
  • Sears closes another 20 stores in the U.S.

    Economic CTV News
    NEW YORK -- Sears is closing another 20 U.S. stores as the ailing retailer tries to turn around its business. Real estate investment trust Seritage, which owns the 20 real estate properties, confirmed the closings-- 18 Sears stores and two Kmart stores -- in a government filing Friday. Source
  • Vancouver passes Toronto as 'most expensive' city in Canada

    Economic CTV News
    An annual ranking of the cost of living in hundreds of cities worldwide suggests that Vancouver has overtaken Toronto as the most expensive in Canada, although both remain relatively affordable by global standards. The Mercer 2017 Cost of Living Survey placed Vancouver at 107, followed by Toronto at 119, Montreal at 129, Calgary at 143 and Ottawa at 152. Source
  • Inflation rate cools to 1.3% in May as food prices now cheaper than a year ago

    Economic CBC News
    Food prices have gotten cheaper in the past year, Statistics Canada says. (The Associated Press) The cost of living went up by 1.3 per cent in the year up to May, a slightly slower pace than it increased by a month earlier. Source