Quebec Government to Support Bombardier's CSeries Sales
Move may help spur orders. Provincial loans will represent up to 10% of the value of the planes.
The Toronto Globe and Mail (4/4, Cousineau) reports, “The Quebec government is offering up to $1-billion in loans to prospective buyers of Bombardier Inc.'s new commercial aircraft, the C Series. Premier Pauline Marois's cabinet made the decision on March 7 at the request of Bombardier, but it was only made public Wednesday in the province's official gazette.” The government said the “new financing is offered ‘because the final assembly ofthe CSeries is done in Quebec’ and because Bombardier's latest aircraft program ‘represents an important economic interest’ for the province.”
The Toronto Star (4/30, Lu) reported that “To date, the orders for the two sizes of CSeries planes have been weak, with firm orders of only 148 out of 382 commitments. CSeries customers include Lufthansa, Swiss International Airlines, and U.S.-based Republic Airways.” The company’s target is 300 orders from 20 customers by the time of entry into service in mid-2014.
The Star also noted that the CSeries 100 jet, with 100 to 125 seats, sells for a list price of $62 million, and the CSeries 300 jet, now adjusted with 135 to 160 seats, is listed at $71 million, though airlines can usually negotiate discounts. Bombardier is not saying the costs for the option of the high-density plane of up to 160 seats.
The Canadian Press (4/4) reports, “The aid will take the form of interest-bearing loans granted to buyers of CSeries aircraft, said Chantal Corbeil, spokeswoman of Investissement Quebec, the government agency that will manage the funding. Governments in Canada, Britain, and China will finance up to 85% of the value of the planes. Quebec loans will represent up to 10% of the value of the planes, Britain will contribute 18 to 20% and China 12 to 15%. Export Development Canada will contribute the remainder.”
The Montreal Gazette (4/4, Shalom) reports, “Quebec has backstopped about $2.3 billion of Bombardier aircraft sales since 1996, and IQ spokesperson Chantal Corbeil told Canadian Press that her agency has not incurred any significant losses.” The Gazette notes, “The CSeries, currently estimated to come in six months late and fly by late June, is girding for battle in smaller single-aisle aircraft with giants Airbus SAS of Europe and Chicago's Boeing Co. The airliner is by far the most ambitious project in Bombardier's 27-year history in aircraft and will break up the duopoly the two major firms have long carved up between themselves.”