May 4, 2016 / 8:54 PM / in 2 years

Bombardier not studying bigger version of CSeries jet: sources

MONTREAL/PARIS (Reuters) - Canada’s Bombardier BBDb.TO is not looking at building a bigger version of its CSeries jetliner, three people close to the company said on Wednesday.

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

There has been persistent analyst and media speculation that Bombardier would add a third member of its slow-selling 108-130-seat jet family to compete with best-selling Airbus AIR.PA and Boeing BA.N models that carry at least 150 people.

But despite earlier suggestions that Bombardier could enlarge its new jet to boost sales, the so-called ‘CS500’ version, which could cost up to $750 million to develop, is not being considered, the people said.

“It is not on the table,” one said, asking not to be identified.

Bombardier last week scored a much-needed sale of 75 CS100 CSeries models to Delta Air Lines DAL.N.

Delta’s new chief executive said it was potentially interested in anything larger that Bombardier could produce.

Although Bombardier has toyed with the idea of building a bigger plane in the past, now is not the right time to consider breaking into the cut-throat 150-seat category as it tries to build on Delta’s backing of its existing model, the people said.

Some Canadian media have reported a larger CSeries could form part of a $1 billion package of federal support being negotiated between Bombardier and Canada’s government.

Chief Executive Alain Bellemare said last week Bombardier’s focus was on its 108-seat CS100 and 130-seat CS300 models and a new business jet.

“I think that, for us, is plenty. Our business case is all built around that: the CS100 and the CS300. It’s funny that people are already thinking about what’s next,” he told Reuters.

Bombardier has long argued there is a promising market in the 100-150-seat segment, just below the best-selling Airbus and Boeing models, but has suffered years of disappointing sales.

One source familiar with Bombardier’s thinking said it would be “suicidal” for the company to launch a CS500 anytime soon, because it would thrust the cash-strapped planemaker into direct competition with Airbus and Boeing.

Industry strategists say the two giants would relish drawing the CSeries into their core market, where their high volumes and pricing power could give them a strong advantage despite the Canadian plane’s partly newer technology.

A second source close to the program said it would cost $500 million to $750 million to stretch the CS300.

The CS300, however, has the capability to be expanded if the market needs it, the program head said last year.

Reporting by Allison Lampert, Tim Hepher, Editing by Amran Abocar; Editing by Janet Lawrence, Bernard Orr

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