Bombardier's Belfast plant may not build jets

WORKERS AT Bombardier's Belfast plant may lose out despite the aircraft manufacturer's decision to proceed with its CSeries regional jet later this year.

The Canadian group has revived plans for the 110-130 seat jet following interest from Qatar Airways, Lufthansa and International Lease Finance, the world's largest aircraft leasing firm. It is also in discussions with US airlines that will soon need to replace large fleets of ageing MD-80 and DC-9 aircraft, including Northwest and Delta, which are in merger talks.

Pierre Beaudoin, chief operating officer of Bombardier's aerospace unit, has said he wants firm orders for 50-100 planes before deciding to build the CSeries.

However, Mr Beaudoin also cast doubt on whether production of the aircraft's wings would go, as originally intended, to the group's Belfast plant, the former Shorts aircraft operation. Bombardier said it was reviewing an earlier decision to build the aircraft's wings at its plant in Belfast and the rest of the plane in Montreal.

The relative strength of the Canadian dollar and sterling may prompt Bombardier to switch to potentially cheaper US sites, Mr Beaudoin said. "We have to be competitive and make the best choice for Bombardier shareholders," he said.

Building in the US would give Bombardier a "natural hedge" because the planes are priced in US dollars. The CSeries, which could enter service in 2013, would be as much as 20 per cent more fuel-efficient than current aircraft of similar size, Bombardier said.

With Airbus and Boeing focused on developing much larger aircraft over the next few years, Bombardier expressed confidence that the CSeries would capture half of the projected market in 100-149-seat aircraft over the next 20 years - around 5,900 aircraft, which would see the company producing around 220 of the jets a year. Bombardier expects to split the approximate C$3.2 billion (€2.1 billion) cost of the project equally between Bombardier, its suppliers and the Canadian and British governments.

Mr Beaudoin said the amount provided by the UK and Canadian governments "will be in line with what ends up being done in those countries".

- (Additional reporting, Financial Times service /Bloomberg)