First CSeries Still Lacks Launch Customer
Darren Shannon darren_shannon@aviationweek.com 
Bombardier has finalized its second CSeries deal with the placement of a firm order with Lease Corporation International Aviation, although the Canadian manufacturer has still to sign a launch customer for its baseline CS100, which is scheduled for entry into service in 2013.
This latest sale, which comes just weeks after Deutsche Lufthansa signed the CSeries' first firm order, will place three CS100s and 17 CS300s with the Dublin-based lessor. All three CS100s are scheduled for delivery in the second quarter of 2014, while the CS300s are expected to be rolled out over a 24-month period starting in the first quarter of 2015, LCI Aviation Chief Investment Officer Tasos Michael told AviationWeek.
LCI Aviation has yet to secure any operators for the 20 aircraft, although Michael said this is of little concern. Talks are ongoing with legacy and low-cost carriers in Asia, Europe and North America and Michael believes the first batch of CS100 may be placed with a single operator.
The lessor, which was formed in 2004, currently leases Airbus and Boeing narrow- and widebodies to legacy carriers including British Airways and Singapore Airlines. The lessor is currently adding six widebodies to its fleet and expects to have a portfolio of about a dozen aircraft by the middle of this year.
LCI Aviation's CSeries firm order has a list price of $1.44 billion, which includes the airframes and 40 Pratt & Whitney PW1000G geared turbofan engines. The lessor has options on 20 more CSeries aircraft; again most are for the larger CS300 variant.
With this sale Bombardier now has 50 firm orders for its CSeries and a further 50 options.
"This firm order for both CS100 and CS300 aircraft adds to the momentum we anticipated for CSeries aircraft following the initial firm order by Deutsche Lufthansa. Moreover, LCI's purchase confirms the flexibility designed into this technologically advanced aircraft family as required by all our customers, but especially leasing companies," said Bombardier Commercial Aircraft President Gary Scott in a release.
"We are grateful for LCI's confidence in the CSeries aircraft and delighted to welcome them as the launch leasing company customer. We look forward to working with them on further development of the aircraft for its entry into service in 2013."
Bombardier has still to finalize an entry into service customer for its 110-seat CS100 variant, although the company has indicated a deal could be imminent. Lufthansa's 30 CS100s will be delivered to its Swiss International Air Lines subsidiary starting 2014.
"We are excited about the future of Bombardier's CSeries jetliner family," said LCI Chairman Adam Tomazos. "Market studies carried out by ourselves and other organizations see a large worldwide demand for aircraft in the 100- to 149-seat category over the next two decades and the CSeries jetliner family is a perfect fit."
LCI Aviation's CIO also noted the importance of Bombardier's launch date for an aircraft that promises improved fuel efficiency, lower emissions, and increased use of composites. "With the launch in 2013 we saw a window of opportunity for this new aircraft type. There is a lot of evidence the geared turbofan engines will provide the promised efficiencies, and we are confident of placing these aircraft; this should be fairly easy if it [the CSeries] meets all its performance goals," said Michael.
The lessor sees the CS300 as a logical replacement for Airbus' A319 and Boeing's 737-700 - aircraft types that may not be replaced by a new generation until 2020 - and the CS100 as a possible upgrade from the aging DC-9s and MD-80s currently in service.
This does not, however, preclude the lessor placing most if not all of its CSeries with one carrier. "If we went with a low cost carrier, 20 aircraft is too few to launch a new fleet, so we felt the need to place the 20 options," noted Michael. "We feel we can place the 20 [firm orders] and dip into the options." Neither of LCI Aviation's CSeries types has been assigned a configuration so the lessor can retain flexibility in placing the aircraft.
Financing should not be a problem, added the LCI Aviation executive. "This [LCI Aviation] is a strong group, we have our deposits down and we can make the [pre-delivery payments]. We just financed half a dozen widebodies at a value equal to the 20 aircraft we are purchasing from Bombardier. The reality is, it is more complicated [to raise financing] but not impossible," said Michael.
LCI Aviation is part of U.K.-based conglomerate The Libra Group, and was formed in 2004 with a fleet valued at more than $1 billion. It continued to grow until November 2007 when the company sold most of its fleet, some 20 or so aircraft, when prices were high. LCI Aviation starting rebuilding its fleet last year and by the middle of 2009 expects a portfolio worth more than $1 billion, said Michael.
Artist's concept: Bombardier
