Bombardier Aerospace

From Wikipedia, the free encyclopedia
Jump to: navigation, search
Bombardier Aerospace
Subsidiary
Industry Aerospace
Predecessor Canadair
Headquarters Dorval, Quebec, Canada
Area served
Worldwide
Products Aircraft
Revenue $10.5 billion (2014)[1]
Number of employees
34,100, at year end 2014[2]
Parent Bombardier Inc.
Slogan "Ingenuity in Flight"
Website www.aerospace.bombardier.com

Bombardier Aerospace (French: Bombardier Aéronautique) is a division of Bombardier Inc. The company competes with Brazilian rival Embraer for the title of the third largest aircraft manufacturer after Boeing and Airbus. It is headquartered in Dorval, Quebec, Canada.[3]

History[edit]

Main engineering building and assembly plant of Bombardier Aerospace at Montréal-Pierre Elliott Trudeau International Airport

After acquiring Canadair in 1986 and restoring it to profitability, Bombardier in 1989 acquired the near-bankrupt Short Brothers aircraft manufacturing company in Belfast, Northern Ireland. This was followed in 1990 by the acquisition of the bankrupt Learjet Company of Wichita, Kansas, builder of business aircraft, and finally the money-losing Boeing subsidiary, de Havilland Aircraft of Canada based in Toronto, Ontario in 1992.[4]

The aerospace division now accounts for over half of the company's revenue. Bombardier's most popular aircraft currently include its Dash 8 Series 400, CRJ100/200/440, and CRJ700/900/1000 lines of regional airliners. It also manufactures the Bombardier 415 amphibious water-bomber (in Dorval and North Bay), the Global Express and the Challenger business jet. Learjet is also a subsidiary of Bombardier based in Wichita.

Bombardier had been in discussions with Mirabel, Quebec (near Montreal) and, in 2008, with Kansas City, Missouri[5] for a $375 million US assembly plant, for its future CSeries aircraft, which Bombardier is marketing as a replacement for aging DC-9, MD-80, and early, smaller versions of the Boeing 737.

This new jet, which offers 110-seat and 130-seat versions, competes with the Boeing 737 Next Generation 737-600, 737-700, Airbus A318, Airbus A319, and Embraer 195. Bombardier claims the CSeries will burn 20% less fuel per trip than these competitors,[6] which would make it still about 8% more fuel efficient than the Boeing 737 Max scheduled for introduction three years later in 2017.

The launch customer for the CSeries, Lufthansa, has signed a letter of intent for up to 60 aircraft and 30 options.[7] The manufacturing complex in Montreal will be redeveloped by Ghafari Associates to incorporate lean manufacturing of its CSeries aircraft.[8]

In March 2011, the company obtained 50 firm orders and a further 70 optional order for jets from NetJets worth more than US$2.8 billion to US$6.7 billion, respectively.[9]

Also in March 2011, Bombardier signed a memorandum of understanding (MOU) with China's ICBC Financial Leasing to provide advance aircraft payment financing for Bombardier customers worth $8 billion.[10]

In January 2012, Bombardier began manufacturing simple structures such as flight controls for the CRJ series from a transitional facility near Casablanca, Morocco, its first facility in Africa. On 30 September 2013 it broke ground on its permanent facility, due to open late 2014.[11]

In October 2012, a joint development deal between Bombardier Aerospace and a government-led South Korean consortium was revealed, to develop a 90-seater turboprop regional airliner, targeting a 2019 launch date. The consortium would include Korea Aerospace Industries and Korean Air Lines.[12]

In November 2012, the company signed the largest deal in its history, with Swiss luxury aviation company VistaJet, to deliver 56 Bombardier Global jets for a total value of $3.1 billion. The deal includes an option for Bombardier to manufacture and sell an additional 86 Global jets, which would value the entire transaction at $7.3 billion.

In April 2013, Canada's Porter Airlines placed a conditional order for 12 CSeries planes, with options for another 18.[13] However, this was conditional on the Billy Bishop Toronto City Airport (on an island just off downtown Toronto) allowing jets to use the facilities and on a 550-metre extension of a runway. As of November 4, 2015, a decision had not yet been made by the city, Ports Toronto and the federal government. Studies underway include an environmental assessment, master planning exercise and preliminary runway design.[14]

In January 2014, the parent company cut 1,700 employees from Bombardier Aerospace to save costs due to a 19 percent drop in orders in 2013.[15]

In July 2014, Bombardier reorganized its corporate structure in response to its underperformance. President Guy Hachey retired and Bombardier Aerospace was split into three divisions: business aircraft, commercial aircraft and aerostructures and engineering services. As part of the corporate overhaul, 1,800 jobs were cut.[16] In its year end statement, Bombardier Aerospace reported that it had reduced the number of employees by 3,700 in 2014, delivered 290 planes in 2014, and had orders for 282 more; the company also claimed "strong long-term potential".[2]

On October 29, 2015 Bombardier announced a US$4.9-billion third-quarter loss[17] and took a $3.2 billion writedown on the CS series in the third quarter.[18] Bombardier also said it would cancel its Learjet 85 program, taking another US$1.2-billion writedown and cancelling the 64 outstanding orders.[17] Particularly because of the CSeries,[19] the company's debt had reached approximately $9 Billion. Bombardier shares fell 17.4 per cent on that day, perhaps because the CSeries had not recorded a single firm order since September 2014.[17]

As of 21 December 2015, the company had only 243 firm orders for the CSeries but the US $2.5 billion in cash infusion - $1 billion from the provincial government plus a $1.5 billion investment from the Caisse de depots et placement du Quebec - was keeping Bombardier Inc. (the parent company) adequately funded and optimistic.[20] At that time, the federal government had not yet made a decision as to whether a grant will be provided but Prime Minister Justin Trudeau told the media on 11 December that he is well aware of the importance of the aerospace sector to the country's economy.[21]

After a very long and expensive development process, costing $5.4 billion (US) to date, and including a $3.2 billion (US) writeoff, the smaller (110-125 seat) CS100 version of the CSeries received initial type certification from Transport Canada on 18 December 2015.[22] At the time, the company had only 243 firm orders and letters of intent and commitment for another 360, with the most recent in September 2014.[23]

Most of these were for the CS300 model. The latter is expected to receive certification in approximately six months. The first CS100 is expected to be flying by mid-2016 in Lufthansa colours.[24] “Certification is a great thing, but 2016 is going to be critical for orders,” analyst Chris Murray, a Managing Director with Alta Corp, told Bloomberg Business.[23] Fred Cromer, president of Bombardier’s commercial aircraft unit hinted during a press conference on 21 December 2015 that price cuts - or other incentives - may be offered during negotiations in order to jump start sales. (List price for the CS100 is $71.8 million and for the CS300, it's $82 million, US.) In addition to attractive prices, customers “are going to want support, they are going to want spares, they are going to want training,” he explained. While Cromer would not offer specifics, his comments about the possibility of an "aggressive deal" were widely published world-wide and that is likely to plant the seed about discounting in the minds of potential purchasers.[23]

In an attempt to boost its profit margin, Bombardier Aerospace announced on 12 January 2016 that it would cancel deals with its third party sales agent (Tag Aeronautics). The company also said it would cancel 24 firm and 30 optional orders for its planes, hoping to resell those aircraft later, without paying a sales agency fee.[25]

Marketing of the CSeries was adversely affected by production delays and stiff competition in early 2016. Although Delta Airlines said it was seriously looking at the Bombardier offerings, some analysts believe that Delta may be swayed by competitors offering deep discounts.[26] And on 20 January, United Continental Holdings Inc. announced that it had ordered 40 Boeing aircraft instead, the 737-700.[27] Aside from ready availability of a series already in full production, the purchase of Boeing vs. Bombardier planes was financially prudent. Since United already flies 310 of the 737 series, there will be a savings in terms of pilot training and in the amount of spare parts that will need to be stocked. David Tyerman, an analyst with Canaccord Genuity offered the following assessment of the impact of this news to the Toronto Star: "This just shows how difficult it is for Bombardier to win orders these days. It’s not the end of the world, but this loss illustrates what they are up against. It also raises the question of how profitable the next C Series order they win will be for them."[28]

Government assistance[edit]

Also on 29 October 2015, the Quebec government announced that it would invest US $1 billion (roughly CAD $1.3 billion) to save the struggling series and protect jobs [17] in what some called a "risky gambit".[29]

That would give the province a 49.5% interest in the limited partnership that will control the assets, liabilities and obligations of the CSeries program.[30] Media reports initially suggested that Bombardier had also asked Ottawa for a repayable loan of $350 million [18] but it became clear that the province expected the federal government match its $1 billion loan in return for a near 50 percent stake in the CSeries jets project.[31] There would be "unbelievable pressure" on this government to help the company, Ian Lee, an economics professor at Carleton University’s Sprott School of Business, predicted.[32] Aid was definitely essential, because the project has saddled Bombardier with debt, forcing it to into a struggle to raise cash in order to keep it afloat.[33]

Both the provincial and federal contributions would be in the form of a repayable loan but it is questionable whether they would ever be repaid according to independent economist Mark Milke.[34] In fact, Milke also referred to the bailout loans as "corporate welfare" in the Globe and Mail of November 4, 2015.[35]

A few days after his swearing-in, on 10 November 2015, Prime Minister Justin Trudeau told the Canadian Labour Congress that Bombardier Inc. must make a "strong business case" for federal aid.[36] Trudeau agreed that the company exemplified important high value manufacturing "... an extremely important part of Canada for years to come. Aerospace is a great example of that, as is the auto sector and others" [37] but made it clear that the government's decision would be based on the best interest of Canadians, not on "emotion, politics or symbols".[31]

Government subsidy controversy[edit]

Brazil and Canada engaged in an international, adjudicated trade dispute over government subsidies to domestic plane-makers in the late 1990s and early 2000s. The World Trade Organization decided Brazil ran an illegal subsidy program, Proex, benefiting Brazilian plane-maker Embraer from at least 1999-2000, and that Canada illegally subsidized its indigenous regional airliner industry.

Comac collaboration[edit]

On 24 March 2011, Comac and Bombardier Inc. signed a framework agreement for a long-term strategic cooperation on commercial aircraft. The intention is to break the near-duopoly of Airbus and Boeing.[38][39]

Products included in the programme include:

Aircraft[edit]

Business jets[edit]

Bombardier Global family[edit]

Bombardier Global landing at Montreal International Airport

In 2010, Bombardier launched an updated family of long-range business jets:[40]

Commercial jets[edit]

Bombardier CSeries CS100 Flight Test Vehicle (FTV1) at Mirabel

Turboprops[edit]

Cancelled Concepts[edit]

  • BRJ-X (Bombardier Regional Jet eXpansion) - introduced 80-110 seat jetliner in 2005 and revived by CSeries program

Military Aircraft[edit]

Unmanned Aerial Vehicles[edit]

Facilities[edit]

Bombardier Aerospace has manufacturing, engineering and services facilities in 27 countries.[43] The production facilities are located in Canada, the United States, the United Kingdom (Northern Ireland), Mexico and Morocco.[44]

Production[edit]

Bombardier Aerospace fiscal or calendar year delivery of regional, business and amphibious aircraft:

Fiscal/calendar year 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011 2012 2013 2014
Commercial CRJ 81 105 165 191 214 175 110 64 62 56 60 41 33 14 26 59
Q-Series 23 52 41 29 19 22 28 48 66 54 61 56 45 36 29 25
Business Learjet 109 129 96 38 41 47 69 71 81 70 44 33 33 39 29 34
Challenger 40 38 45 23 31 62 98 99 103 116 82 63 79 86 89 90
Global 34 36 21 16 17 22 30 42 48 53 50 47 51 54 62 80
Amphibious CL-415 5 10 2 1 3 1 2 2 1 4 5 4 4 4 3 2
Total Deliveries 292 370[52] 370[53] 298[54] 324 329[55] 337[56] 326 361[57] 353[58] 302[59] 244[60] 245 233[61] 238[62] 290[63]
Net orders 363 698 367 11 201 249 481 388 282

Gallery[edit]

See also[edit]

Notes[edit]

  1. ^ http://www.bombardier.com/en/media/newsList/details.bombardier-inc-20150212bombardierq42014financialresults.bombardiercom.html
  2. ^ a b http://ir.bombardier.com/var/data/gallery/document/21/49/11/25/14/Bombardier-MDA-Fiscal-Year-2014-en2.pdf
  3. ^ "Aerospace Directory." Bombardier Inc. Retrieved on December 4, 2010. "400 Côte-Vertu Road West Dorval, Québec Canada H4S 1Y9." Address in French: "400, chemin de la Côte-Vertu Ouest Dorval (Québec)."
  4. ^ "Inc. - Bombardier - Home". Bombardier. 2011-02-25. Retrieved 2011-03-02. 
  5. ^ http://www.bizjournals.com/kansascity/stories/2008/03/24/daily12.html
  6. ^ A New Bombardier Jet Draws Only Tepid Demand Jet New York Times, July 14, 2008
  7. ^ — Farnborough, U.K. Aerospace (2008-07-13). "Bombardier Press Release, July 13, 2008". Bombardier.com. Retrieved 2011-03-02. 
  8. ^ "Bombardier awards contract to Ghafari to redevelop CSeries Aircraft Manufacturing Complex". ATW Online. 2010-08-16. Retrieved 2010-08-16. 
  9. ^ The Globe and Mail
  10. ^ "Bombardier signs financing deal with China's ICBC Financial Leasing". Calgary Herald. Retrieved 6 March 2011. 
  11. ^ Bombardier Aerospace Breaks Ground on New Moroccan Manufacturing Facility
  12. ^ Choi Kyong-Ae (8 October 2012). "South Korea Consortium in Talks With Bombardier About Developing Passenger Plane -Source". Wall Street Journal. Retrieved 10 October 2012. 
  13. ^ http://www.bombardier.com/en/media/newsList/details.43556-porter-airlines-signs-purchase-agreement-for-up-to-30-bombardier-cs100-aircraft-becomes-cseries-aircrafts-canadian-launch-customer.bombardiercom.html?filter-bu=aerospace
  14. ^ http://www.thestar.com/business/2015/11/03/porter-wants-airport-studies-completed-despite-liberal-win.html
  15. ^ Susan Taylor (January 21, 2014). "Bombardier cuts 1,700 jobs to save cash after jet delays". 
  16. ^ Kristine Owram (26 July 2014). "Bombardier’s aerospace restructuring takes a page from train division". Retrieved 22 August 2014. 
  17. ^ a b c d http://business.financialpost.com/investing/global-investor/bombardier-inc-to-get-1-billion-from-quebec-government-to-rescue-troubled-cseries
  18. ^ a b http://www.theglobeandmail.com/news/politics/liberals-to-decide-on-financial-assistance-for-bombardier/article27030710/
  19. ^ http://ca.reuters.com/article/businessNews/idCAKCN0SS1YQ20151103
  20. ^ Lu, Vanessa (24 November 2015). "We’re being selective, Bombardier says of CSeries customers". Toronto Star (Toronto, Canada). Retrieved 25 November 2015. 
  21. ^ no by-line.--> (11 December 2015). Reuters. Thomson Reuters http://www.reuters.com/article/canada-bombardier-idUSO8N0WT01J20151211?type=companyNews. Retrieved 22 December 2015.  Missing or empty |title= (help)
  22. ^ Lu, Vanessa (18 December 2015). "Bombardier’s CSeries jet certified for commercial service". Toronto Star (Toronto, Ontario). Retrieved 19 December 2015. 
  23. ^ a b c Tomesco, Frederic (21 December 2015). BloombergBusiness. Bloomberg LP http://www.bloomberg.com/news/articles/2015-12-21/bombardier-sees-aggressive-c-series-pricing-amid-order-drought. Retrieved 22 December 2015.  Missing or empty |title= (help)
  24. ^ no by-line.--> (18 December 2015). "Bombardier receives CSeries certification from Transport Canada". CBC News. CBC/Radio Canada. Retrieved 19 December 2015. 
  25. ^ Van Praet, Nicolas (13 January 2016). Globe and Mail (Toronto, Ontario) http://www.theglobeandmail.com/report-on-business/bombardier-ending-sales-contract-with-tag-aeronautics/article28141297/. Retrieved 21 January 2016.  Missing or empty |title= (help)
  26. ^ Reuters (19 January 2016). "Delta Airlines considering purchase of Bombardier C Series jets". Globe and Mail (Toronto, Ontario). Retrieved 21 January 2016. 
  27. ^ Van Praet, Nicolas (21 January 2016). "Bombardier snubbed as United to buy 40 Boeing jets". Globe and Mail (Toronto, Ontario). Retrieved 21 January 2016. 
  28. ^ Bloomberg (21 January 2016). "Boeing beats Bombardier to United airliner sale". Toronto Star (Toronto, Ontario). Retrieved 21 January 2016. 
  29. ^ http://www.reuters.com/article/2015/10/29/bombardier-results-idUSL3N12T3Z520151029#PyerR1FXYBdJPbbX.97
  30. ^ http://www.intelligent-aerospace.com/articles/2015/11/bombardier-bailout-quebec-invest-1-billion-in-c-series-aircraft-program.html
  31. ^ a b http://www.bnn.ca/News/2015/11/10/Trudeau-says-Bombardier-aid-needs-strong-business-case.aspx
  32. ^ http://www.thestar.com/news/canada/2015/11/03/bombardiers-cseries-jam-a-dramatic-early-test-for-trudeau.html
  33. ^ http://www.macleans.ca/news/canada/trudeau-bombardier-must-make-a-business-case-if-it-wants-federal-aid/
  34. ^ http://www.thestar.com/opinion/commentary/2015/11/04/bombardier-exemplifies-the-pitfalls-of-corporate-welfare-goar.html
  35. ^ http://www.theglobeandmail.com/report-on-business/rob-commentary/quebecs-bombardier-bailout-is-not-an-investment-its-corporate-welfare/article27081111/
  36. ^ http://www.cbc.ca/news/politics/bombardier-trudeau-labour-congress-1.3312410
  37. ^ http://www.yorkregion.com/news-story/6109755-bombardier-must-justify-help-trudeau/
  38. ^ "COMAC and Bombardier Sign Strategic Agreement on Commercial Aircraft" (Press release). Bombardier. 24 March 2011. Retrieved 25 June 2011. 
  39. ^ Jon Ostrower (1 April 2011). "Many questions surround Bombardier/Comac partnership". Flight Global. Retrieved 25 June 2011. 
  40. ^ "NBAA: PICTURE: Bombardier reveals new Global business jet family". Retrieved 2010-10-17. 
  41. ^ a b — Atlanta Aerospace (2010-10-16). "Bombardier Grows Its Flagship Global Family with Two New Jets: the Global 7000 and Global 8000 Aircraft". Bombardier.com. Retrieved 2011-03-02. 
  42. ^ Bombardier postpones CSeries entry into service until 2015 16 January 2014, retrieved 13 March 2014
  43. ^ aerospace.bombardier.com - Worldwide Presence
  44. ^ aerospace.bombardier.com - About Us
  45. ^ Bombardier in Canada
  46. ^ Bombardier in the USA
  47. ^ a b Bombardier in Ontario
  48. ^ "Bombardier Inaugurates Learjet 85 Aircraft Component Manufacturing Facility in Queretaro, Mexico". Reuters (Press release). Bombardier. 21 October 2010. Retrieved 14 May 2012. 
  49. ^ aerospace.bombardier.com - Bombardier in Mexico
  50. ^ belfast.aero.bombardier.com - Capabilities
  51. ^ Bombardier Aéronautique Maroc : Démarrage de la production à Casablanca dans une usine provisoire L'Usine Nouvelle, 8 February 2013
  52. ^ Bombardier Posts Record 370 Aircraft Deliveries.
  53. ^ Bombardier Announces That Bombardier Aerospace is On Target With 370 Aircraft Deliveries.
  54. ^ Annual Report Year Ended January 31, 2003 - Bombardier.
  55. ^ Bombardier Delivers 329 Aircraft for Fiscal Year 2004/05: Second Consecutive Year of Increased Deliveries.
  56. ^ Bombardier aircraft – Fiscal year 2005/06 deliveries.
  57. ^ An Exceptional Year for Bombardier Aerospace in Terms of Deliveries and Orders: 361 Aircraft Delivered and 698 Orders Placed in Fiscal Year 2007/08.
  58. ^ Bombardier Aerospace Delivers 353 Aircraft and Records 378 Net Orders in Fiscal Year 2008/09.
  59. ^ Bombardier Aerospace Bombardier Aerospace Delivers 302 Aircraft in Fiscal Year 2009/10.
  60. ^ Bombardier Aerospace Delivers 244 Aircraft in Fiscal Year 2010/11.
  61. ^ Bombardier Aerospace Delivers 233 Aircraft and Receives Orders for 481 Aircraft in 2012.
  62. ^ Bombardier Aerospace Delivers 238 Aircraft and Receives Orders for 388 Aircraft in 2013.
  63. ^ Bombardier Aerospace Delivers 290 Aircraft and Receives Orders for 282 Aircraft in 2014. from 2014 annual report

References[edit]

  • Commercial Aircraft and Airline Markings by Christopher Chant.

External links[edit]