Canadian rival to Boeing 737 isn't off the ground at Air Show

The new CSeries narrow-body jet from Canada's Bombardier has got no lift so far at the Farnborough Air Show.

In the weeks before the show, Canada's Bombardier was working on lining up deals. But the Canadians so far haven't closed a single sale, deflating the high expectations.

Instead of the CSeries gathering momentum at the show, there's been talk of Airbus and Boeing killing the new jet's chances before it can fly.

"Bombardier has got to turn this around fast," said Teal Group aviation analyst Richard Aboulafia, in London for the show. "This was the window of opportunity in the market. It's clear the big guys (Boeing and Airbus) are going to start responding in earnest. In a year they (Bombardier) might not have the opportunity."

Boeing has a big stake in the outcome because the 145-passenger CSeries jet, if built, would compete with the Renton-built 737.

Tuesday at Farnborough, the Bombardier executive in charge of the CSeries program put a brave face on the letdown.

Gary Scott insisted he remains "in advanced discussions with a handful of customers."

"We expect those to translate to firm orders in the not-too-distant future," he said in an interview. "Our momentum is good."

Qatar Airways was one customer expected to announce a CSeries order at Farnborough. Qatar Chief Executive Akbar Al Baker blamed the lack of a deal on unresolved negotiations with engine-maker Pratt & Whitney.

Late Tuesday night in London, rumors of a Qatar news conference Wednesday morning suggested a deal might still be imminent.

But that wouldn't be nearly enough for Bombardier to declare success at a show where Boeing and Airbus have garnered lots of orders and where interest is high in new-technology engines because of the price of oil.

"They are waffling over one customer rather than showing lots of interest and orders," said Aboulafia. "There need to be orders from a couple of strategic customers who endorse a new market entrant."

McNerney: Plants

must 'earn' work

Jim McNerney, chief executive of Boeing, said Tuesday in an interview at the Farnborough air show that the Puget Sound region will have to continue to earn its status as the main center of Boeing manufacturing and keep work from moving to alternative sites.

"Everett and Renton will remain for the near and the medium term the center of most of what we do," McNerney said. "Over time, sites including Puget Sound will earn their way with our customers. They'll be productive, innovative, have work forces that get the work done."

"Right now, Puget Sound is that," he said. "But they have to remain that way."

He set out a vision of the company allocating work on merit to competing sites, including the new Dreamliner manufacturing complex in Charleston, S.C.

"Having Charleston as a capability strengthens the company," he said. "I don't think we're ever going to give up our rights to place work where it makes sense," McNerney said. "But as long as sites remain competitive, they are going to get work. Over the next 10 years, it's hard to imagine Puget Sound wouldn't have the preponderance of work for the Boeing Company."

For Washington state employees, McNerney laced this reassurance with a warning reference to the region's history of labor strikes.

"At the end of the day, we're about providing technology and satisfying customers," McNerney said. "If we can do that in Puget Sound, like we have in large part historically — not always, but in large part — they will retain a lot of the work."

But McNerney seemed dubious about the chances of one solution to the strike issue: hammering out a long-term agreement with the International Association of Machinists (IAM) when contract negotiations come due again in 2012.

Last month, management at Spirit Aerosystems in Wichita, Kan. — the former Boeing plant that makes the entire 737 fuselage, the cockpits of all the wide-body jets, plus other parts — successfully negotiated a landmark 10-year deal with the IAM that includes work guarantees and pay raises linked to profits.

A year ago, Boeing and the IAM in Puget Sound failed to reach such a deal, which led directly to the decision to locate the second 787 assembly plant in North Charleston instead of Everett.

"We couldn't close on an agreement that made sense for both of us, which doesn't mean we shouldn't try again," McNerney said.

But then he added a precondition that could be a roadblock: "I want an agreement that makes us more competitive and that doesn't give up fundamental management rights to run the company," McNerney said. "Guaranteeing work in most forms runs that risk."

The Spirit agreement will likely be central to the IAM's negotiating strategy in 2012. Guaranteeing work is what they want. But McNerney is giving nothing away in advance.

Airbus chief tours

787 Dreamliner

Airbus Chief Executive Tom Enders and his super-salesman Chief Operating Officer John Leahy were given a personal tour of Boeing's 787 Dreamliner at Farnborough by Boeing CEO Jim McNerney and Commercial Airplanes Chief Jim Albaugh.

The courtesy tour was a reciprocal visit. When the Airbus A380 superjumbo jet first appeared at an Air Show, in Paris in 2005, Airbus provided a similar tour to the then head of Boeing Commercial Airplanes, Alan Mulally.

"We all love aviation," said Enders Tuesday. "We all get excited when someone brings new toys to the show."

Enders also watched the Dreamliner take off for Seattle late Tuesday afternoon. What did he think?

"It'll be a very good airplane," he said. "Ours will be better."

He meant the A350, which is scheduled to enter service in three years.

Leaving the Airbus chalet and heading into London with Leahy to meet with customers, Enders couldn't resist a parting shot.

He asked why Boeing didn't fly the plane in the flying display Monday, but instead chose to fly it only on departure.

Boeing's policy is not to do flying displays with commercial jets; executives consider it a risk not worth taking to make an airliner do atypical flying over crowds.

Airbus in contrast provides an awesome display every day of the show by sending up its A380 for slow and low flybys.

"They bring new planes and park them," said Enders. "We bring new planes and fly them."

Boeing, Airbus get

243 sales at show

Airbus and Boeing enter the third day of the Farnborough Air Show today almost tied on new orders after racking up collective contracts for 243 jetliners with a value of more than $23 billion at list prices.

Boeing won 121 orders worth $11.6 billion after Steven Udvar-Hazy's Air Lease Corp. bought 54 737-800 single-aisle aircraft. Airbus has sales agreements for 122 jets valued at $11.7 billion, excluding 50 A320s ordered by Chile's LAN Airlines and subject to confirmation.

Boeing's total omits three 787 Dreamliner planes bought by Royal Jordanian Airlines and 12 737-800 purchased by Dublin- based Avolon Leasing Group, which had already been included in the U.S. company's total without the acquirers being disclosed.

Orders at this year's Farnborough event stand at more than three times the 78 announced at last year's Paris Air Show, with which the U.K. event alternates, and further commitments are likely today. The tally trails the 373 firm orders announced by Airbus and Boeing in Farnborough in 2008.

Bloomberg News contributed the information on order totals.