Air Canada will firm up Bombardier Inc CSeries order within ‘weeks,’ CEO says

Air Canada will set its CSeries order within “weeks,” but some degree of government funding will still be essential to help Bombardier Inc. succeed, the airline’s chief executive said Monday.

“It’s coming together pretty quickly now,” Air Canada CEO Calin Rovinescu told reporters when asked how quickly the airline will turn its letter of intent into a firm order.

“We’re looking at a reasonably short timeframe, as with the following weeks. It’s not going to be a long, drawn-out affair.”

Once this occurs, Air Canada will end up the first firm CSeries customer Bombardier has snagged since September 2014. The offer, which is for 45 from the larger CS300 aircraft, will bring the entire quantity of firm orders for that CSeries to 288, tantalizingly near to Bombardier’s objective of having 300 around the books once the aircraft enters service come july 1st.

Air Canada’s order is worth US$3.8 billion at list prices, even though it has been reported the airline received a substantial discount. It is Bombardier’s first CSeries order from a major United states airline, and also includes an option for 30 more aircraft.

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In an address to the Empire Club of Canada Monday, Rovinescu said Air Canada’s support from the CSeries “sends an important signal towards the market that should give other airlines the confidence to purchase this extremely efficient, next-generation aircraft.”



But he also said the us government must “step up” and accommodate Bombardier’s request for US$1 billion in educational funding.

“For important global champions (like Bombardier) to succeed, they are doing require some degree of support from government,” Rovinescu told reporters after his speech.

“In one fashion or another, if we recognize that Bombardier may be the leader in aerospace in this country, you would expect governments to step up.”

Navdeep Bains, federal minister of innovation, science and economic development, said last week the government continues to be conducting its “due diligence” around the request. Bombardier wants Ottawa to match the US$1 billion it received from Quebec in October. As a swap, the provincial government took a 49.5 per cent stake in the CSeries program.

Rovinescu also weighed in on Alaska Air Group Inc.’s US$2.6-billion deal to buy Virgin America Inc.

The U.S. airline industry has undergone a wave of consolidation which has, up to now, mostly involved larger players like United Continental Holdings Inc., American Airlines Group Inc. and Fuel prices Inc. Rovinescu said the offer, announced Monday, suggests that smaller players want in on the action too.

“It doesn’t alter the landscape dramatically, but generally speaking consolidation has been healthy for the industry; companies are more healthy compared to what they were about ten years ago,” he explained.

“Now you’ve strong companies like JetBlue (another bidder for the Virgin assets) and Alaska which are determining what their next moves are – That’s a healthy thing for that industry.”

Rovinescu said he isn’t concerned about increased competition on Air Canada’s transborder routes in the newly merged airline. Virgin currently has no routes to Canada, while Alaska flies to Calgary, Edmonton, Vancouver, Victoria, Whistler and Kelowna, B.C.