Sean Peever

Not just paying more but going with the cookie manufacture that probably won't make it past the launch of their cookie so if you have a problem with it after you're screwed.

Stranger

I suspect you are overly pessimistic.

Once they start delivering cash flow will switch to positive. Which is a matter of months Most of the costs have already been paid for.

Even if sales continue being slow, eventually they'll pick up. The product is good and once there is an actual record, they'll sell. Also, they fill a niche in which the competition is not all that cost effective.

Reminds me of the story of the 747, how it almost bankrupted Boeing, and the massive layoffs that followed. Plus, it took what, maybe thirty year until the program became profitable, i.e. until they finished paying for development costs plus interests, and real profit started flowing in.

Stranger

They are reengining the E series. However, the E90 is not really the right size for AC anymore now that they are moving to the sardine can/low price model.

Plus, the reliability issue is not going to go away all that easy. And no, it won't be quite as efficient as the CSeries.

OTOH, with cheap oil, efficiency is not as important as it used to. But then, in another five years that may change again. Even earlier if we start recognizing that the Saudi thugs are no better but worse than the IS thugs. And there is just a gentle little push to destabilize them from the right quarters.

Perhaps slightly exaggerated. Plus, I suspect any government would end up doing something similar. Perhaps wrapped under a somewhat different rhetoric.

It's pretty obvious that AC has been sitting in the wings because they expect sooner or later they'll end up with a better deal one way or another.

Sean Peever

well maybe the balance of the two if us will be where is really lands?

Sure, cash flow will be positive once they start selling it (obviously) but they have a long way to go. List price is $62mil, so actual sales will probably average around $55.8mil.

With over $6 billion in the program, and assuming they can actually make around 30% per plane profit once the plane is put together, that is 358 units to break even. I will agree not impossible but a challenge for sure! (by the way, I think 30% is actually generous but I didn't want to be too negative)

Stranger

Survival does not equate to break even on the project. Once they start delivering, money will flow in, which should ensure survival.

(When saying "positive cash flow," I meant the flux direction being positive, I was not meaning a positive discount rate. Which indeed may be quite far down the road.)

The Lev

How is the CSeries riskier than the E2? The CSeries has completed most of its flight testing and is delivering at or above spec. The E2 is still only a paper aeroplane.

Both Bombardier and Embraer are known vendors to AC.

why fly

I agree any govt is going to throw money into the mess, just like AC every time it fails we just give them more money.

gcashin

Doesn't the current pilot contract have a cap on the size of aircraft that can be operated by AC Express? I forget the exact number of seats, but I'm pretty sure that there is a seat cap that means that an E75 or CRA is the largest that can be operated by a regional partner. Given that they recently negotiated a long term contract, I wouldn't expect to see any E90 transfers to Express in the short term unless they re-open a recently signed contract, which is unlikely IMO.

As far as 787's replacing E90's, did you mean 737's?

They've rouged a few former E90 mainline routes (YYZ-YLW, YYZ-YYJ I believe), but they are maxed out on 319 rouge transfers, so they could transfer some of the current leisure-heavy E90 routes if they moved some of the higher traffic rouge 319 routes to the rouge 321 or 763's.

WR Cage

The big question overhanging the CSeries; how will the airplane operate under the riggers of commercial aviation, specifically short hop 9-11 hours per day 6.5 days per week. Typically version 1 of the aircraft uncover numerous operational items that were not uncovered by safety and air worthiness tests during development. E1 series was the first version for Embraer, which the E2 fixes all the operational issues uncovered during commercial operations.

bocastephen

The C Series is tested, but unproven. I think the bigger problem will be inappropriate government intervention which turns a business decision into a political one. We had this problem before when Airbus was able to bribe its way to a huge order with AC, lining all kinds of politician pockets in an action that should have sent countless people to prison and canceled the order - now we have the risk that a new government will step in and force the C Series order to artificially prop up Bombardier, dumping the highly likely "oops sorry about those maintenance problems" fallout on Air Canada, its customers and shareholders.

Is the C Series a good airplane? On paper it appears that way - but no one should be placing a big order until smaller airlines have a few of these aircraft in service for a year or so and we have some reliability and safety statistics to help drive the decision.

winnipegrev

I don't see how this is possible, the Airbus Affair was when AC was a crown corporation. Now that AC is private the Canadian government is powerless in making AC order any particular aircraft, in fact I imagine it would become quite the WTO issue if they tried to pressure AC. But AC ordering CSeries could (indirectly, of course ) make the GoC continue to take seriously AC's bilateral concerns.

canadiancow

I heard some 319s are going back to mainline.

WildcatYXU

That would make sense. I don't think a 319 even with 136 seats can really compete with a 189 seater 738. But a 200 seater 321 can.

pitz

An AC manager as my seatmate told me E90's are starting to leave next week.

i59bravo

YYJ-YYZ has not been Rouged and is currently an A320. I don't recall ever seeing an E90 on this route. When I flew this route last Spring, the 320 was quite full in both directions.