Bombardier continues push for Chinese aircraft orders with enhanced partnership

MONTREAL – Bombardier Inc. is continuing its push to win orders of its CSeries planes in China by strengthening its strategic collaboration with Chinese aircraft manufacturer COMAC to develop common features for their respective aircraft.

“It’s meant to develop commonalities that will make both of our aircraft attractive to customers in China, but also around the world,” said Bombardier spokeswoman Haley Dunne of the plan that will reduce training and maintenance costs.

She said the Montreal-based manufacturer is hoping to get a good share of the Chinese market and has a series of airplanes that are suited for the world’s fastest-growing airline country.

The two companies are pushing ahead with talks on the second phase of their partnership after concluding an agreement to jointly develop four components for their respective CSeries and C919 aircraft.

Completion of the first phase of the agreement comes eight months after Bombardier signed a deal to develop commonalities with China’s larger wide-body airplane and a year after signing a broad framework agreement.

The two companies agreed in the first phase to work together on cockpit-crew interfaces, electrical systems, aluminum-lithium standards and specifications, and technical publications.

Although not identical, the two planes will share some ergonomics, systems and suppliers.

COMAC has adopted the CSeries design concepts on the display consoles and the centre pedestals in their cockpit, making the two cockpits more visually and ergonomically similar.

Both companies will use UTC Aerospace Systems to supply electrical systems that will have similar functionalities, architecture and maintenance requirements.

The same approach will apply to the use of lightweight aluminum-lithium and technical publications for both planes.

With the CSeries running two years ahead of the C919, the Chinese are the ones making most of the adjustments, said Dunne.

“We’re sharing best practices and suppliers and design and that sort of thing but in terms of the adoption of different design concepts, right now the majority of the changes are made on the C919.”

They will now explore further commonalities on marketing and sales co-operation, expanded customer service capabilities and product testing and certification along with collaboration on future planes.

“Part of the goal in this collaboration is to be able to develop products that are appealing to an airline to be purchasing both of our products,” Dunne added in an interview.

She wouldn’t say how much the common features will eventually save airlines by operating both aircraft types, but finding commonalities is a key advantage that Boeing and Airbus have when trying to sell new aircraft to existing customers.

Bombardier (TSX:BBD.B) last week delayed the entry into service of the smaller CSeries aircraft to June 2014, followed by the larger CS300 by December 2014. COMAC’s C919 is set for delivery in 2016.

David Tyerman of Canaccord Genuity said the partnership reinforces Bombardier’s position in trying to win Chinese orders but the financial impact is impossible to enumerate.

He said having airplanes with commonalities will appeal to some airlines, especially those in China and emerging countries that are looking to expand their fleets.

“Until the 919 gets some credibility in the more developed countries … then I would think that Bombardier would offer more to COMAC than COMAC would offer to Bombardier,” he said from Toronto.

By working closely with the Chinese manufacturer and building part of the CSeries fuselage in China, Bombardier has a better shot at winning aircraft orders from the state-directed economy than a company viewed as a fearsome competitor, Tyerman added.

“They’e already done a bunch of things along this line which would say they’re getting all their ducks in a row to set themselves up to really get the orders.”

Canadian Transport Minister Denis Lebel said the air show in Zhuhai, China that started on Tuesday is a great venue to showcase Canadian “know-how and expertise” to its second-largest trading partner after the United States.

“Canada has a secure, reliable, first-class transportation system that is capable and ready to facilitate increased international trade with China and the region, which will in turn help support job creation and economic growth for Canada,” he said in a news release after meeting his counterparts in China.

Bombardier is the world’s third-largest commercial aircraft manufacturer and largest maker of trains. Founded in 2008, COMAC is China’s main commercial aircraft company.

On the Toronto Stock Exchange, Bombardier’s shares lost three cents at $3.34 in afternoon trading Tuesday.