aircraft build time? - Timothy/KuschHi Kusch, yes. Agree with most of what you say. I'd still refer to it as an "estimate", but let's not quibble. It is the planned production rate. And I agree that isnt' something BBD can change dramatically overnight since a lot of planning has to go into the buiding of production facilities - not just at Bombardier's own plants but also those of
C Series' suppliers.
" It was mentioned by someone before that most orders come in the year before the first delivery so BBD has to be prepared."
Yeah, that someone was me. But thanks for bringing it up again. Maybe I should elaborate a bit on my reasons for saying it.
It's based on watching orders for other new commercial jet aircraft - particularly Boeing's new 787 - which I think is a good example because both are technologically advanced aircraft which offer significant reduction in operational costs amounting to roughly 15-to-20% over current aircraft. Of course, there are other considerations such as huge differences in terms of the size categories, but in the absence of other examples to use for a guideline the 787 experience might give us some insight. Hopefuily, minus all the delays that program has been plagued with.
Actually, what I think I said was that the bulk of orders seem most likely to arrive in the two year period just prior to the start of production. The reasoning here is that delivery times come into play. When deliveries for an aircraft are three years or more off in the future, they're probably going to arrive later than an airline can order alternatives such as 737s or A320s since it now takes several years to get delivery on those aricraft.
But as we move closer to the estimated date of production for C Series, with relatively few orders in the backlog, that means delivery of C Series becomes competitive with those of the alternatives - if only by virtue of the fact that it can be delivered sooner. Now delivery dates aren't the only consideration, but for some airlines how fast they can get the new airplanes is a major consideration.
Then the other factors come into play. C Series offers much better operational costs, but with much of the technology as yet unproven the launch customers take a slightly greater risk in helping a manufacturer iron out some of the usual bugs which are involved in getting a new aircraft flying.
Each new order increases pressure on other airlines to step up to place their orders or risk looking at delivery dates which are even further out. If you're an airline now considering C Series and you hear the announcement about Republic's order, if you start to realize that if Bombardier secures another order before you place yours, you could be looking at delivery dates a year or two later.
"Worst case scenario is that no more orders come in and they produce 90 planes at a low rate"
90 aircraft is what Bombardier has firm orders for. With options and some smaller order the total is closer to double that although I haven't checked the latest total recently, but before the Republic order for 40 firm orders and 40 options, the total was closer to 100 with 50 firm. Optional orders are still orders, it's just that they haven't been firmed up yet, which is what the customer does when he, or she makes a "non-refundable" deposit.
Normally, though, for the purposes of calculating backlog, only firm orders are included.
Still, when you throw in the govenment incentives, there's a good chance that even in the worst case scenario Bombardier's losses would be minimal. And the company would still have taken a big step towards learning a lot about what it takes to build larger commercial aircraft.