China remains key market for CSeries despite order freeze, Bombardier says
Nov. 28, 2008 - Montreal - China remains a key market for Bombardier's CSeries aircraft even though the country may delayplacing orders, the aircraft manufacturer said Thursday.
November 28, 2008 By Canadian Press
Nov. 28, 2008. Montreal (CP, By Ross Marowits) – China remains a key market for Bombardier's(TSX:BBD.B)
CSeries aircraft even though the country may delayplacing orders, the aircraft manufacturer said Thursday.Spokesman Marc Duchesne said Bombardier expects China willaccount for 15 per cent of the global aircraft market in the next 20years and be a force in the purchase of new planes.
“It's not (a freeze on orders for) one or two quarters in China
that will prevent the CSeries from being crowned a success,''
Duchesne said in an interview.
“We're looking at selling about 6,300 planes over 20 years, so
we have to look at this in the long term.''
Bombardier continues to work at firming a letter of intent signed
last July by German airline Lufthansa for 30 CSeries, with an option
for 30 more. It's the only commitment announced to date.
However, Duchesne said Bombardier continues to talk with airlines
in Europe, China and North America.
“It's during difficult periods like now that it's important to
develop new planes because when people start again to order aircraft
the CSeries will be ready to be delivered and offer savings.''
Desjardins Securities analyst Benoit Poirier wrote in a report
Thursday that China will likely not be placed in the short- to
Poirier cited a report that China's aviation regulator won't
approve new aircraft orders. No timeframe for the freeze in new
orders was provided, but the economic slowdown has hurt air
passenger traffic throughout the Asia-Pacific region.
The Montreal-based train and plane manufacturer said in July it
signed a contract to have Chinese state-owned Shenyang Aircraft
Corp. produce the centre fuselage for the newly launched CSeries
“We had previously anticipated that a Chinese customer would
place a significant order for the CSeries aircraft given the
contract between Bombardier and Shenyang Aircraft Corporation,''
`However, with the Chinese carriers' poor passenger traffic and
profitability figures, and the announcement by the (Civil Aviation
Administration of China), we believe an order from a Chinese
customer will not be placed in the short- to medium-term.''
The Chinese airline industry saw a loss of approximately US$600
million in the first 10 months of 2008, and China's aviation
regulator said the market could continue to slow for the next two to
three years, Poirier said.
He said the development was negative, but he maintained his buy
rating on the stock, with a price target of $8.
Bombardier shares closed up three cents to $4.12 Thursday on the