Embraer's employees at the company's factory in Sao Jose dos Campos, Brazil: the company is contemplating launching a new jet in the same category as rival Bombardier Inc.?s C Series long-range plane.Victor R. Caivano/The Associated Press
As Bombardier ratchets up its program to build what it hopes will be a game-changing new mainstream jet, competitors are circling.
Montreal-based Bombardier Inc. is hoping it has bet on a winner with its C Series long-range jet in the 100- to 150-seat segment of the market.
It has a lot of company in that category.
There are projects to build similar-sized planes by companies in Russia, China and Japan. Even Boeing Co. and Airbus SAS are contemplating joining the fray.
But on this particular front, a key Bombardier rival has settled on a wait-and-see strategy.
Embraer of Brazil is contemplating launching a new jet in the same category as Bombardier' s C Series, but is still assessing such an entrant's true potential in what is fast becoming a field thick with players, senior executive Mauro Kern says.
"This is becoming a more crowded market. It's not clear to us if this is the market with the biggest potential right now for Embraer," Mr. Kern, executive vice-president of Embraer's just-created New Programs-Airline market division, said in an interview.
The possibility that Boeing and Airbus might modify existing models - the 737 and A320, respectively - with more fuel-efficient engines in order to enter the 100- to 150-seat market is a key factor to be taken into consideration, he added.
Embraer would have to develop a product that is truly innovative and game-changing - embracing the very latest in new technologies and engines - in order to ensure it would be a leading player in a field that would include Boeing and Airbus, Mr. Kern said.
"It's not necessarily just that Boeing and Airbus would enter the market that would make the difference, it's how they intend to address the smaller end of the market and how the other players will attack this market," he said.
Embraer's other options include building a new platform based on its existing family of regional jets in the 70- to 110-seat segment or introducing a new large regional turboprop, he said. Stretching the existing E195 plane is a possibility, he added.
A decision on what direction to take will be made by the end of the year, he said.
Montreal-based Bombardier has so far booked 90 firm orders - as well as 90 optional orders - for its new C Series jetliner.
Bombardier commercial aircraft spokesman John Arnone said the manufacturer is not fretting over the interest the 100- to 150-seat segment is attracting among rivals.
"What's central to our strategy is to be the first one out," he said. The first C Series deliveries are expected in 2013.
The aircraft is also a game-changer because it will offer airlines and air cargo operators 15 per cent lower cash operating costs and up to 20 per cent lower fuel costs, as well as quieter and more environmentally friendly engines, he said.
"I would describe us as being in a leadership position in that segment with a game-changing aircraft."
Bombardier says it is aiming for a 50-per-cent market share with its C Series aircraft.
In a recent research note, RBC Dominion Securities Inc. analyst Walter Spracklin said Bombardier management indicated recently that an announcement by Airbus is possible in July on plans to re-engine its A320 in order to enter the smaller market segment that the C Series will occupy.
Mr. Spracklin said Bombardier management noted that both Boeing and Airbus would be offering only shrunken versions of their full-size models, which is "less optimal," and that the savings to airlines are not as clear-cut as with the C Series.