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Air Canada to Purchase Bombardier C Series as Part of its Fleet Renewal Program

Air Canada to Purchase Bombardier C Series as Part of its Fleet Renewal Program

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Old Feb 17, 16, 5:12 am
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Air Canada to Purchase Bombardier C Series as Part of its Fleet Renewal Program

Air Canada to Purchase Bombardier C Series as Part of its Fleet Renewal Program

Agreement includes 45 firm orders plus options to purchase an additional 30 aircraft

MONTREAL, Feb. 17, 2016 /CNW Telbec/ - Air Canada today announced that it has entered into a Letter of Intent (LOI) with Bombardier Inc. for the acquisition of up to 75 Bombardier CS300 aircraft powered by Pratt & Whitney PurePower® PW1500G engines as part of its narrowbody fleet renewal plan. The LOI contemplates 45 firm orders plus options to purchase up to an additional 30 aircraft and includes substitution rights to CS100 aircraft in certain circumstances.

Deliveries are scheduled to begin in late 2019 and extend to 2022. The first 25 aircraft on delivery will replace Air Canada's existing mainline fleet of Embraer E190 aircraft, with the incremental aircraft supporting Air Canada's hub and network growth, creating one of the world's youngest, most fuel efficient airline fleets.

The C Series purchase is subject to completion of final documentation and satisfaction of certain other closing conditions precedent.

"We are delighted to announce this important agreement with Bombardier for the purchase of CS300 aircraft as part of the ongoing modernization of Air Canada's narrowbody fleet," said Calin Rovinescu, President and CEO of Air Canada. "With its high fuel efficiency performance and greater seating capacity, the next generation technology of the C Series is very well suited for our current and future network strategy and will be an extremely efficient addition to our fleet. The renewal of our North American narrowbody fleet with more capable and efficient aircraft is a key element of our ongoing cost transformation program - plus the enhanced passenger cabin comfort provided by the CS300 will help us to retain Air Canada's competitive position as the only Four-Star international network carrier in North America.

"The entry of the C Series into our fleet is expected to yield significant cost savings. We have estimated that the projected fuel burn and maintenance cost savings (on a per seat basis) of greater than 15 per cent should generate an estimated CASM reduction of approximately 10 per cent, when compared to the aircraft it will replace.

"Air Canada has a long history of collaboration with Bombardier. Air Canada Express regional partners operate one of the largest fleets of Bombardier aircraft in the world with a mix of over 135 regional jets and turboprop aircraft by December 31, 2016.

"We were one of the launch customers for the Canadair Regional Jet and today's announcement reflects our continued support for Canada's aerospace industry and for the new technologies the industry may develop. We fully expect the new technology of the C Series to efficiently meet the demanding needs of our current and future network strategy," concluded Mr. Rovinescu.

The acquisition of the C Series aircraft represents a key element of Air Canada's narrowbody fleet renewal program and complements the acquisition of 61 Boeing 737 MAX aircraft announced in December 2013 to replace the larger end of the airline's mainline narrowbody fleet. The Boeing agreement provides for Boeing to purchase up to 20 of the 45 Embraer E190 aircraft in Air Canada's fleet and the first 25 C Series will replace the remaining E190s. Boeing 737 MAX deliveries are scheduled to begin in late 2017 and extend to 2021, while the C Series deliveries are scheduled to start in late 2019 and extend to 2022.
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Old Feb 17, 16, 5:20 am
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AC must have got a hell of a price per unit.
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Old Feb 17, 16, 5:42 am
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Hope the passenger experience is as good on the new aircraft as it is on the E190's.
(with regards to seat comfort, leg room, window size, etc.)

Also wondering where the remaining 25 E190's will end up.
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Old Feb 17, 16, 5:52 am
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Originally Posted by airbus320 View Post
AC must have got a hell of a price per unit.
I'm guessing fairly hefty federal/provincial gov't subsidies for BBD to sell them jets at a fraction of the list price in order to hopefully nudge the market.

This surprises me for sure. Also in the news this morning is BBD are laying off 7,000 people.
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Old Feb 17, 16, 5:53 am
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The Pratt & Whitney PurePower® PW1500G engines are awesome - ultra-efficient, ultra-low emissions, ultra quiet.
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Old Feb 17, 16, 5:59 am
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Originally Posted by YZF_Elite View Post
I'm guessing fairly hefty federal/provincial gov't subsidies for BBD to sell them jets at a fraction of the list price in order to hopefully nudge the market.

This surprises me for sure. Also in the news this morning is BBD are laying off 7,000 people.

http://www.cbc.ca/news/business/bomb...cuts-1.3451335
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Old Feb 17, 16, 6:57 am
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Wow. Did not expect them to buy the C-series.
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Old Feb 17, 16, 7:03 am
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Originally Posted by Diabeetus View Post
Wow. Did not expect them to buy the C-series.
Agree. I thought the matter was dead.

Bombardier is moving after a near death experience.

Today in Singapore, BBD ;announced the expansion of the Q400 to 90 seats

http://www.bombardier.com/en/media/n...ardiercom.html
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Old Feb 17, 16, 7:16 am
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Originally Posted by airbus320 View Post
AC must have got a hell of a price per unit.
That's all I can think of, AC must got them dirt cheap (hopefully good for future stock price)

I suppose it's a win-win for both
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Old Feb 17, 16, 7:19 am
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i'd like to know exactly how much of a soaking tax payers are getting here.
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Old Feb 17, 16, 7:24 am
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This was always going to happen in reality. The E90's never worked out, and no long term replacement was announced.

The 737-Max order was for all 8-9's, and perhaps the 48 options/rights to purchase were considered for 7's, but the 737-MAX 7 is simply not the same bracket.

The only surprise is the orders atm are all for CS300. One could argue that particular plane is more of a challenger to the 737-7 where the smaller plane probably plugs the gap of the outgoing E90 better. Given the main narrowbody fleet will 737's, I'd be astonished if all of these orders do end up being the CS300.
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Old Feb 17, 16, 7:27 am
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Originally Posted by moorw003 View Post
This was always going to happen in reality. The E90's never worked out, and no long term replacement was announced.

The 737-Max order was for all 8-9's, and perhaps the 48 options/rights to purchase were considered for 7's, but the 737-MAX 7 is simply not the same bracket.

The only surprise is the orders atm are all for CS300. One could argue that particular plane is more of a challenger to the 737-7 where the smaller plane probably plugs the gap of the outgoing E90 better. Given the main narrowbody fleet will 737's, I'd be astonished if all of these orders do end up being the CS300.
The initial press release mentions that some orders can be converted to 100 series

Originally Posted by moorw003 View Post
This was always going to happen in reality. The E90's never worked out, and no long term replacement was announced.

The 737-Max order was for all 8-9's, and perhaps the 48 options/rights to purchase were considered for 7's, but the 737-MAX 7 is simply not the same bracket.

The only surprise is the orders atm are all for CS300. One could argue that particular plane is more of a challenger to the 737-7 where the smaller plane probably plugs the gap of the outgoing E90 better. Given the main narrowbody fleet will 737's, I'd be astonished if all of these orders do end up being the CS300.
The LOI contemplates 45 firm orders plus options to purchase up to an additional 30 aircraft and includes substitution rights to CS100 aircraft in certain circumstances.

Last edited by tcook052; Feb 17, 16 at 7:41 am Reason: merge posts
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Old Feb 17, 16, 7:41 am
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I know! That's why I said "atm".

The main point is it seems odd to go with CS300's over 737 Max 7s when the rest of the fleet will be 737Maxs aswell. Operating costs will likely be lower for the C-series vs the 7 for sure. But once you've factored in fleet commonality and training, that's not so certain.

I expect a mix of CS100 and CS300 when they start to be delivered.

I'm delighted they have ordered. I have a soft spot for Bombardier aircraft.
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Old Feb 17, 16, 7:45 am
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I'm also pretty shocked they've done this - I agree they must've been given a sweet deal.

Can anyone elaborate more on why the E90s haven't worked out for AC?
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Old Feb 17, 16, 7:55 am
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I am so glad that AC finally decided to purchase Cseries jets.....
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