July 12, 2008 / 5:03 PM / 9 years ago

Bombardier poised to launch new plane

4 Min Read

<p>Pierre Beaudoin (L), newly appointed president and chief executive officer of Bombardier Inc., waits for the start of the company's annual meeting as Laurent Beaudoin (2nd L), chairman of the board, looks up from his notes in Montreal, June 4, 2008. Bombardier has called a news conference for Sunday amid speculation the Canadian firm could announce the long-awaited launch of its CSeries jet.Christinne Muschi</p>

LONDON (Reuters) - Canada's Bombardier (BBDb.TO) looked set on Saturday to announce the long-awaited launch of its CSeries airliner in a bid to end a transatlantic duopoly held by Boeing (BA.N) and Europe's Airbus EAD.PA.

The Montreal-based firm called a press conference for 5:30 a.m EDT (0930 GMT) on Sunday at Farnborough, a day before the world's largest air show begins there on Monday -- an unusual move signaling an attempt to get on stage first with a major announcement.

The 100-130 seat CSeries would put the third-largest civil aircraft manufacturer in direct competition with the smaller types of single-aisle jets produced by Airbus and Boeing. For years they have divided the market for jets with over 100 seats.

A decision on whether to go ahead with a formal launch of e Bombardier CSeries, which has been available for pre-sale for several months, has been one of the most keenly awaited moves at an air show overshadowed by gloom over high oil prices.

A company spokesman declined to give further details.

But a source close to the CSeries project said Sunday's announcement would provide "excellent news" on the plane.

The CSeries aircraft would mark a branching out from Bombardier's current lines of regional jets and turboprops, which hold up to 100 or 80 passengers, respectively.

The main aircraft that would compete against the CSeries are Boeing's 737-600 and 737-700 and Airbus's A318 and A319. They have a combined backlog of some 1,100 planes.

The CSeries would also compete with the ERJ190 made by Brazil's Embraer (EMBR3.SA) (ERJ.N), Bombardier's main rival.

A formal launch would imply firm orders that would also benefit Pratt & Whitney (UTX.N) which will provide the engines.

Before it can formally go ahead with the project, Bombardier has said it needs to get firm orders for 50 to 100 aircraft.

Lufthansa (LHAG.DE), Qatar Airways, and International Lease Finance Corp, a unit of American International Group Inc (AIG.N) have expressed interest, according to the planemaker.

China Southern Airlines (600029.SS) has also been named as a potential customer.

Weak credit market conditions, combined with sky-high fuel prices, do not make for an easy environment for a new launch though the CSeries plane is expected to vaunt fuel savings.

Bombardier faces a July 15 deadline to decide on a tentative contract agreement with the machinist union in Montreal, which could influence the timing of the launch announcement.

The union reached a tentative deal last week on a contract that stipulates that the CSeries will be assembled at the Mirabel plant north of Montreal, rather than in Kansas City, Missouri, which is also courting Bombardier for the contract.

Bombardier has said a decision on where the aircraft will be built will be part of its larger launch decision, while the union said the deadline was picked to coincide with a possible Farnborough announcement.

Additional reporting by Leah Schnurr; Editing by Charles Dick

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