PARIS (Reuters) - Canadian aircraft maker Bombardier (BBDb.TO), under pressure to boost sales of its new CSeries narrow-body jet, said an upgrade to a larger plane by launch customer Swiss for part of its 30 jet-order showed confidence in the project.
The CSeries made its air show debut in Paris on Monday ahead of certification expected at the end of this year, and Bombardier is hoping to revamp the jet’s reputation to drive sales after years of delays and cost overruns.
Bombardier said Swiss, owned by Lufthansa (LHAG.DE), would convert 10 of its 30-ordered CSeries jets to the larger CS300 version and they would be received by the customer in 2017.
The conversion showed confidence in the CSeries family, said Bombardier, which has not announced a single firm CSeries order since September.
“The CS100 aircraft provides the extraordinary field performance needed for operations at some very challenging airports, while the CS300 aircraft provides outstanding economics,” Bombardier’s president of commercial aircraft Fred Cromer said.
But in blow, Qatar Airways said separately on Monday it was no longer interested in the CSeries.
Bombardier also said it was working with existing customer Russian leasing company Ilyushin Finance (IFC) to find appropriate aircraft and financing solutions.
IFC said it wanted to revise the terms of its CSeries order during the air show being held this week. IFC signed a deal in 2013 to acquire 32 CS300 with an option for an additional 10.
“We’re working with IFC very closely ... to make sure we have the right aircraft solutions for them, the right financing factors for them and we’re going to continue to find ways, in some cases, creative ways, to make that happen,” Cromer told reporters, declining to elaborate.
IFC has cited delays in aircraft delivery and the suspension of export financing of Russian companies by Export Development Canada following Western sanctions over Moscow’s role in the Ukraine crisis, as the reason for seeking the revision.
Bombardier’s CEO acknowledged earlier this month the company was under pressure to discount the CSeries, which is trying to break into the smaller narrow-bodied market dominated by Boeing (BA.N) and Airbus <AIR .PA> with the 737 and the A320 respectively.
When asked, Swiss CEO Harry Hohmeister said he didn’t think the conversion to the CS300 would affect the price of the order, originally announced in 2009.
“I don’t think so. We have a framework contract and ... it’s not so easy to renegotiate,” he told reporters.
The first part of the Swiss order, 10 CS100s, will be received next year and enter service in the middle of the year, said Hohmeister.
The airline would take a decision on the mix of CS100 and CS300 for the remaining 10 orders before the end of 2016.
Reporting by Sarah Young; Editing by James Regan and Mark Potter