October 2, 2012 A Vue From The Wing
When I say Bombardier, what do you think of? To an aviation buff the cramped cabin of a CRJ-200 or the high-wing of a Q400 may come to mind. Also, if you are into other modes of transport Bombardier makes airport trains, ala ATL. What you don’t think of is Airbus and Boeing. Airbus and Boeing are the big guys and everyone else in the commercial aircraft market is the “little” guys. That view is going to change. Both Airbus and Boeing have put up new designs of their narrow-body jets. Together the new designs have over 2000 orders. The narrow body market is huge and there is not a lot of competition market. For Bombardier this is a challenge to be taken on.
Bombardier’s CS300 marks their entry into the narrow body market. Currently they have a 138 firm orders including orders from Air Baltic. Vueling, a Spanish LCC is also considering the CS300 as they prepare to replace 60 aircraft. Originally marketed as large capacity regional jet, Bombardier has decided to market a 160 seat version in direct competition with the A320 and 737. For a jet with a capacity listed in the 110-149 seat range, this change is significant. However, despite Bombardier’s intent to challenge the A320 and 737, I don’t think this will be a successful outing for a couple of reasons.
Commercial airlines are very conservative. One of the reasons the 737 and A320 have been successful and not abandoned by Boeing and Airbus is that the airframes are hugely reliable. Both designs have been in production for well over twenty years each, this gives the airline a huge amount of data to evaluate dispatch reliability and over all safety. The CS300 is a new player, it doesn’t have the pedigree that the 737 and A320 have. But’s that not the only problem.
Next, the way Bombardier gets to 160 seats automatically excludes a large number of airlines. Bombardier says they will not stretch the airframe, instead to get the extra 11 seats airlines can remove a lavatory and go down to 28in pitch. 28in pitch borders on violating the Geneva Convention on human rights, it is incredibly uncomfortable for anyone who is taller than say five feet. This configuration limits the marketability of the plane to ULCC’s like Ryanair, and Spirit Airlines. For a plane that starts with a limited market, this configuration narrows it even more.
Bombardier has taken the worst of both worlds approach to marketing the CS300. First, because it is a new airframe that is being marketed to airlines already invested in the A320 and 737, the aircraft will have to be discounted sharply to attract buyers. This of course limits the profitability of the aircraft. Next, Bombardier has also limited the market of the plane to LCCs and ULCCs. While that market makes up the bulk of narrow body aircraft, it’s hard to see airlines like EasyJet dumping their A320 fleet for the CS300, again unless it is deeply discounted.
In short, Bombardier has created a plane without a market. This leaves it up to the Bombardier sales force to create a market for the plane, and is a tall order in a world filled with A320’s and 737s. Possible, yes, but I don’t think it is going to happen for them.