Plenty of Sunshine in Montreal: Bombardier’s CSeries 100 Takes Off

The CSeries is in the air, and it’s carrying the hopes of an entire company with it.

| More on:
The Motley Fool

The sun has come out for Bombardier’s (TSX: BBD.B) CSeries 100.  Finally.  After waiting for the right weather and conditions for the launch of the CSeries, today offered plenty of sunshine in Montreal, and the CSeries launch was on.  And Bombardier has a lot riding on the success of this plane.  In recent years, Bombardier has struggled with declining revenues and declining margins, and ongoing delays in its CSeries program that has left its stock price in limbo.

Its first CSeries aircraft is expected to be delivered in 2015.

Competitive Advantage

The CSeries is manufactured using a patented “resin transfer infusion” process, which is used to make lighter-weight composite wings.  Also, according to the company, the plane will need fewer inspections due to better corrosion resistance and fatigue strength.  Finally, there is also room for customization on the CSeries planes according to the customer’s needs.

The company says that the plane will have a 15% operating cost advantage, a 20% fuel burn advantage and will be significantly quieter.


Bombardier’s business is very capital intense, and the CSeries program has been no exception.  The total cost of the program is $3.5 billion and may be adjusted upward at final count.  This however is the price of entering into a brand new market: the market of commercial passenger single-aisle aircraft between 100 and 160 passengers.

As always, Bombardier will face stiff competition from its closest competitor, Embraer.  Embraer’s new E2 family of jets, particularly the E195 will be the biggest competition for Bombardier’s CSeries.  In addition, Airbus and Boeing are both very active in this market.  Airbus’ A319 Neo, a direct competitor to Bombardier’s CSeries, is scheduled to arrive in the market as early as 2016.  While Boeing and Airbus have been discounting their planes in order to get ahead of Bombardier, the company has no plans to participate in discounting.  Their plane will stand on its competitive advantages.

Bottom Line

At this time, Bombardier only has 177 firm orders for the CSeries, but expects to have 300 by the time the plane enters service.  Bombardier is predicting that sales of the CSeries will add an additional $5 billion to $8 billion in revenue within five years.  The company predicts that airliners will buy 6,900 planes with a 100 to 150 seating capacity over the next 20 years, and it plans to capture half of that market.  If this occurs, the C-Series could be a game changer for Bombardier.  Time will tell however.  To get a better sense for the plane’s prospects, keep an eye on the data that comes in over the next few months.

3 US Stocks Every Canadian Should Own

Bombardier competitor Boeing has performed well in 2013, despite some well publicized troubles with its new Dreamliner aircraft. Are there other U.S. companies you should consider in order to diversify your portfolio? The Motley Fool has put together a Special FREE Report, “3 U.S. Stocks Every Canadian Should Own.” Just click here now to receive your copy at no charge!

The Motley Fool’s purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool Canada’s free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead.

Follow us on Twitter and Facebook for the latest in Foolish investing.

Fool contributor Karen Thomas does not own shares in any companies mentioned at this time.  The Motley Fool does not own shares of any company mentioned at this time. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

More on Investing

dividends grow over time
Dividend Stocks

Earn Passive Income With This 7.6%-Yielding Dividend Stock 

A 7.6% dividend yield is generally opportunistic when dividend stocks are down. But what if you could lock in a…

Read more »

Businessperson's Hand Putting Coin In Piggybank
Dividend Stocks

Manulife Stock: A Good Buy for Income-Hungry Investors

Manulife is a value stock that could be a good buy for income-hungry investors, especially on dips to $24 and…

Read more »

money cash dividends
Dividend Stocks

Passive Income: How to Make $100.13 Per Month Tax Free

Passive income is great, but only if it lasts. This is why investing in this dividend stock is a top…

Read more »

Dividend Stocks

The Top Canadian REITs to Buy in December 2023

Two Canadian REITs are the top choices if you want exposure to the real estate sector and monthly dividends.

Read more »

exchange traded funds
Tech Stocks

The ABCs of Diversifying Away From SPY Stock for Canadians Investing in the U.S.

If SPY stock is your only country-level diversification, you are missing out on some opportunities. Here are the ABCs of…

Read more »

woman retiree on computer
Dividend Stocks

Pensioners: 2 Cheap Dividend Stocks to Buy Today for TFSA Passive Income

These top TSX dividend stocks now offer 7% yields.

Read more »

Dividend Stocks

My 2 Favourite TSX Dividend Stocks for December 2023

These dividend stocks continue to see buy recommendations from analysts, and are the top choices in their sectors. So now…

Read more »

Dividend Stocks

TFSA Investors: Buy This Stock That Just Increased its Dividend by 10%

This dividend stock just boosted its dividend yield by 10%, adding on share buybacks as well. Should investors consider it…

Read more »