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Bombardier Bullish on China

Bombardier Bullish on China
Forecasts strong market for jets. Hong Kong air show gaining ground
China needs 1,660 aircraft - seating up to 149 passengers each - over the next 20 years, providing ample space for the home-built ARJ-21 85-seater regional jet and Bombardier's proposed 100-to-130-seater C-Series, Trung Ngo, the Montreal-based firm's vice-president of marketing, regional aircraft, said yesterday.

Ngo, along with executives from Boeing and Airbus, was attending the Asian Aerospace Show in Hong Kong, showing the flag and underscoring the Chinese market's importance for Bombardier.

The world's emerging markets, with China well in the lead, will absorb 40 per cent of the civil aircraft being produced, Western companies estimate.
The Hong Kong show might soon become as important as ones in Paris, Farnborough and Dubai.

Bombardier is supplying technical assistance to AVIC1, one of China's biggest aircraft firms, for the ARJ-21 regional jet, due to fly in 2008-09 and enter service in 2011 after international certification.

AVIC1 makes fuselage and other parts for Bombardier's Q400 turboprop series and its waterbomber.

Under a memorandum of understanding, it will invest $400 million U.S. in the C-Series for a plant to make the centre fuselage section and possibly other structural parts.

The new service is expected to attract some Montreal-area passengers - especially those living on the South Shore - who would otherwise fly out of Pierre Elliott Trudeau airport.

"They're a competitor," Cherry acknowledged.

"Are they going to take a piece of the market? Yes."

But Cherry said he expects the impact to be greater on Burlington International Airport in Vermont, which attracts about a third of its passengers from Quebec.

Plattsburgh has the advantage of free parking over Burlington. Train service is available once a day between Plattsburgh and Montreal for $34 U.S.

"I think the first casualty of this war will be across Lake Champlain," Cherry said. "I think you'll see some intense price cutting across the lake."

U.S. discount carrier Jet Blue Airways Corp. flies from Burlington to Fort Lauderdale via a stopover in New York City.

According to the Jet Blue website, the cheapest round-trip flights to Fort Lauderdale starting mid-November would run about $300 U.S., including taxes.

By comparison, the Allegiant-air website shows a round-trip flight from Bangor, Me., to Orlando, Fla., in November - the carrier doesn't offer service to Fort Lauderdale from Maine - including fees and taxes, costs $234.80 U.S.

A round-trip flight to Orlando or Fort Lauderdale on Air Canada's low-cost Tango service would cost more than $400, according to the carrier's website.

While the prices of Air Canada, West Jet and other Canadian carriers are competitive, higher taxes and fees are putting them at a disadvantage next to U.S. rivals, Cherry said. Similarly, Canadian airports, which cover their own capital costs, plus pay rent and municipal taxes, are in an unfair fight with U.S. cross-border competitors who don't carry such fiscal burdens.

"If all I had to do was pay my staff and my contractors, I could do a lot to bring prices down," Cherry said.
By: Robert Gibbens, The Gazette
© The Gazette (Montreal) 2007

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