The CS500 ImperativeWith the CS100 and CS300 development programs winding down, I think it's time for the Bomber to jump in with both feet on the CS500. This will launch their CSeries program into the stratosphere.
The link below to an AirInsight article outlines how big the potential prize is, and how Boeing and Airbus have exited the 100-150 seat market, leaving a replacement opportunity of nearly 2000 aircraft to Bombardier and Embraer. In reality, the 100-125 seat market is probably 1/3 of that total and the 130-145 seat market is 2/3, of which Bombardier has no real competition for the CS300 because Embraer can't stretch the eJet that far. Bombardier knows it, which is why they're still in active negotiations with a number of airlines and aren't willing to budge on the price like they were earlier this year.
Once the CS300 is certified in Europe and the US (they said in July that it would be another 40 days, I guess they were off a little on the timing), I expect significant orders over the next two years.
But the real prize is the 150-165 seat market. Between them, Airbus and Boeing already have 6000 orders for the A320NEO and MAX8. This is the sweet spot of the Aircraft market worldwide and the CS500 will have the best economics. Bombardier can enter the market and capture a mere 5-10% market share and still sell 1000+ planes over 10 years. With their superior economics, just imagine they capture 20%+ of the market.
Yes, Airbus and Boeing will fight a fierce fight, but they can't discount every campaign to the point of being unprofitable. There are just too many campaigns to be able to win on every deal. Lufthansa and Delta have also proven they've got the will to make Bombardier a third player in the commercial aircraft market, so I anticipate they'd be the early supporters of the CS500 with significant orders. Heck, Delta still has to replace their aging MD-88's and the CS500 is the perfect addition to their fleet.
It'll cost $1 billion to develop the CS500 and another $1 billion to ramp up production lines. Whether they tap into the federal government, sell Learjet, raise shares, spin off the rail division, or a combination of these options, they'll have the resources to pull it off. It's just time they go for it. We will all be richly rewarded.
Link to AirInsight article