The CS100 obtains 75 firm orders and additional 50 options from Delta Airlines (click here). That’s a very good news for Delta, Bombardier and the aerospace industry in Canada.
With Delta order announcement and Air Canada announced intention to order C Series aircraft, the target of 300 orders prior to the entry into service will be reached or exceeded.
In my opinion, the market for the C Series is more than big enough to guarantee a very profitable C Series program. My very rough estimates puts the total C Series deliveries at 3,500 units in 20 years. It may or may not include some enhanced versions. That number is only about 13% of the forecast narrowbody deliveries in the next 20 years (click here).
In a French blog, I wrote an article about the aviation market that is growing (click here). Air travel will continue to grow and thus the air transport industry needs more aircraft for replacement and growth.
Replacement And Growth
The topic about replacement and growth was discussed in this blog back in September 2010 after I attended a meeting on North American market forecast (click here). I invite you to revisit that very specific blog entry. Basically in 2010, Boeing forecast US$ 700 billion of new aircraft deliveries in the North American market. I am pretty sure the number has grown bigger today considering the constant growth of air travel.
Boeing 2010 CMO North America – image courtesy of Boeing
About two third of North America deliveries will be for replacement. That’s a huge number! One day, I took the time to count the number of small narrowbody aircraft and also big regional jets. In less than two hours and using only available information on the Internet, I found more than 4,000 aircraft. Those aircraft will have to be replaced in the next 20 years.
North America And Europe
So, in 2016 the C Series has two major orders from North American airlines. One from Delta and the other from Air Canada. Most probably other airlines will follow.
Coincidentally, I wrote a blog entry about the North America and Europe several months ago (click here). You need to read that blog entry too, in which I wrote the following.
“I was asked several months ago where the CSeries will sell best. Well, the answer is not too difficult because the biggest aviation market is in the North America and Europe. So, I answered simply North America and Europe. That’s too easy, isn’t it?
Now, someone else asked me the question, “Which airlines are potentially CSeries’ customers because they have all bought Airbus A320 and Boeing 737?” Well, I answered the question with a simple response, “All of them are potentially CSeries customers.”“
Anyways, the reality is that some airlines’ fleet are so huge that they can easily have several sub-fleet. More interestingly, those airline will have to accept mixed fleet from now on, whatever their choice is.
Today’s narrowbody aircraft are two digit percentage more efficient than the previous ones. In simple words, the new aircraft coming soon have all a step change in term of efficiency. So, it would be a heresy not to take delivery of those aircraft. However, those aircraft will have new engines, new documentation, new systems and so on. Even the “re-engined” version aircraft are basically new aircraft.
Whatever an airline’s choice is, it will have to undergo a transition to the new version of narrowbody, including the associated “transition cost”. In this context, I sincerely think the C Series can break into the market easily. And it does.
Delta Order Is Interesting
The CS100 order from Delta shows how important the CS100 is in the C Series program. If you look carefully into Delta’s choice, you can deduce that the airline is not ready to give up frequency on certain routes. In addition, Delta might be thinking about long-term network structural changes.
I am today wondering if Delta is not thinking about more point-to-point flights bypassing their hubs. I am not at all saying that domestic hubs like Denver or Atlanta will disappear, not at all. Nevertheless, very efficient, very capable and small enough aircraft like the CS100 opens new possibilities.
What if the CS100 order is part of a larger strategic plot? It is a coincidence that I posted something about Delta’s intention to develop a hub in Seattle (click here).