Bombardier unlikely to win more orders at Farnborough for CSeries: analyst

Bombardier unlikely to win more orders at Farnborough for CSeries: analyst July 17, 2008: FARNBOROUGH, England — Aviation analyst Jacques Kavafian says he no longer believes that Bombardier (TSX:BBD.B) will announce more orders for its newly launched CSeries at this week's Farnborough Air Show in England. The Toronto-based analyst had previously expected that more than 200 aircraft could be ordered by up to five launch customers for the Montreal company's new fuel-efficient narrow body aircraft. But pronouncements from two of them has caused him to change his assessment. International Lease Finance Corp. and Qatar Airways announced Tuesday that they aren't yet prepared to order the 110-to 145-seat jets, even though they remain interested. "As a result of ILFC and Qatar's pronouncements, we are no longer expecting any CSeries orders at this air show," he wrote in a report Wednesday following the show's second day. Lufthansa became the first CSeries customer when Bombardier announced Sunday that the German airline had signed a letter of interest for up to 60 aircraft, at a price of US$46.7 million each. The deal is worth more than $2.8 billion if firm and optional orders are exercised. Kavafian had predicted that Shanghai Airlines and China Southern would also place orders at the show. Bombardier has said that discussions with a number of airlines worldwide "are progressing well." Other airlines that have been mentioned as potential customers down the road are Malaysian Airlines and U.S. airlines Northwest and Delta. Leasing is believed to be an attractive option for some airlines because of the recent credit turmoil. But ILFC said it will wait to see how the U.S. industry restructures before committing to an order. Qatar Airways said it will make a decision "in the not too distant future." "We continue to remain confident that the airline will select the CSeries aircraft, whether for the full number of aircraft required or a partial order," Kavafian said. While Bombardier's early buzz at the air show has faded, Chicago-based Boeing Inc. (NYSE:BA) and Europe's Airbus Industries have generated strong orders. Airlines have placed orders for a record 313 aircraft by the show's second day, up from 89 when the show was held two years ago. Air China ordered 45 Boeing aircraft, Avia Leasing Ltd. signed up for 24 Sukhoi Superjet 100s and Aviation Capital Group ordered 23 Airbus A320s. Airbus has captured 43 per cent of orders at the show in the first two days, compared to 32 per cent for Boeing and 25 per cent for other manufacturers. Bombardier shares lost 27 cents, or 3.89 per cent, to $6.67 in trading Wednesday morning on the Toronto Stock Exchange.