Bombardier faces discount headache as CSeries sales take off

Sat Jun 4, 2016 7:52am EDT
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By Tim Hepher and Victoria Bryan

DUBLIN/ZURICH (Reuters) - Bombardier (BBDb.TO: Quote) is stepping up efforts to woo the airline industry with its more efficient new CSeries jet, hoping to win new orders without falling under the spell of prolonged discounting on price.

The Canadian planemaker flew top executives to a meeting of international airlines in Dublin this week, where it sought to build on a much-needed order from Delta Air Lines (DAL.N: Quote), and on Friday then flew the heads of Star Alliance member airlines from Dublin to Zurich.

"We are in a good place today. We have the contracts ready for you as you exit the plane," Chief Executive Alain Bellemare joked to the 28 top airline executives on board the 110-seat aircaft.

While the cash-squeezed project was saved from a near-death experience with Delta's discounted order, Bombardier's rivals and others in the industry predict it will remain on the rack a while longer as others demand equal bargains.

"I want the best deal, better than Delta," said Tewolde Gebremariam, chief executive of Star Alliance member Ethiopian Airlines.

While he probably won't get that, having expressed an interest in acquiring only 10 to 15 jets rather than the 75 bought by Delta, his remark illustrated Bombardier's challenge.

"The question is whether or not Bombardier will be successful in raising prices,” said Bertrand Grabowski, a managing director of Germany's DVB Bank.

"For this to happen, it needs ... a steady growth market."   Continued...

A Bombardier C Series aircraft is displayed at the Singapore Airshow at Changi Exhibition Center February 18, 2016.  REUTERS/Edgar Su/File Photo