Sales slowing at Bombardier

Photo: Contributed

Fears of a Chinese economic slowdown that shocked markets and rattled investors is also hampering Bombardier's efforts to finalize sales of its new CSeries aircraft, the Montreal aircraft manufacturer says.

"Discussions are moving at a slower pace," says spokeswoman Marianella de la Barrera.

Bombardier said it remains in discussions with potential buyers, especially customers with conditional orders for the plane set to enter into service next year.

"Those are the ones we're waiting to go firm and they are taking a little more time," de la Barrera said.

The company is looking to end a global slump by winning its first firm CSeries order since last September. China is a key growth market.

Bombardier (TSX:BBD.B) is maintaining its bullish long-term outlook for Chinese commercial aircraft orders as the growing middle class is increasing air travel and spawning the construction of some 100 new airports by 2020.

It also anticipates a recovery in demand for business jets after a step down from "phenomenal growth" between 2008 and 2012 caused it to slow the rate of production for its Global 5000/6000 planes. The company predicts China could order 875 business jets valued at US$33 billion from manufacturers over the next decade.

Meanwhile, Quebec-based flight simulator maker and pilot training provider CAE (TSX:CAE) remains optimistic as air travel continues to grow in China despite economic troubles in China.

"So far, our Asian training centres continue to operate at normal capacity," said vice-president Helene Gagnon.

CAE has nearly 15 training centres in Asia and joint ventures with airlines including China Southern and China Eastern.

U.S. aerospace giant Boeing said it expects the global aviation industry will need more than one million new workers through 2034 — 558,000 commercial pilots and 609,000 maintenance technicians. About half the spaces will be filled in the Asia Pacific region.

It anticipates that the Chinese fleet will almost triple by 2034 with orders for 6,330 planes valued at nearly US$1 trillion.

The company also expects growing sales of its wide-body 787 and 777s. That will help Canadian landing gear supplier Heroux-Devtek (TSX:HRX), which is beefing up its workforce as it prepares to build the world's tallest landing gear for Boeing's 777 aircraft.

While lower economic growth is not positive, analyst Seth Seifman of J.P. Morgan said demand for aircraft is relatively secure as global air traffic is expected to grow five per cent annually through 2019.

In China, air traffic has grown 15 per cent so far this year. While aircraft deliveries are expected to slip next year, Chinese carriers will continue to add capacity and could announce orders as the government releases its next five-year plan in October, he said.

"Given the government's goal of making China's economy more consumer-oriented we expect air travel to remain a priority," he wrote in a report.