Bombardier Aerospace (French: Bombardier Aéronautique) is a division of Bombardier Inc. It is headquartered in Dorval, Quebec, Canada.
Video Bombardier Aerospace
History
After acquiring Canadair in 1986 and restoring it to profitability, in 1989 Bombardier acquired the near-bankrupt Short Brothers aircraft manufacturing company in Belfast, Northern Ireland. This was followed in 1990 by the acquisition of the bankrupt American company Learjet, a manufacturer of business jets headquartered in Wichita, Kansas; and finally the money-losing Boeing subsidiary, de Havilland Aircraft of Canada based in Toronto, Ontario in 1992.
The aerospace company now accounts for over half of Bombardier Inc.'s revenue. In 2015 and 2016, the most popular aircraft included its Dash 8 Series 400, CRJ100/200/440, and CRJ700/900/1000 lines of regional airliners although the company was devoting most of its Research and Development budget to the newer CSeries. It also manufactured the Bombardier 415 amphibious water-bomber (in Dorval and North Bay), and the Global Express and the Challenger lines of business jets.
The CSeries, which Bombardier offers in several size versions, is competing with the Airbus A318 and Airbus A319; the Boeing 737 Next Generation 737-600 and 737-700 models; and the Embraer 195. Bombardier claims the CSeries would burn 20% less fuel per trip than these competitors, which would make it still about 8% more fuel efficient than the Boeing 737 Max, which was introduced in 2017. The launch customer for the CSeries, Lufthansa, signed a letter of intent for up to 60 aircraft and 30 options in 2008. The manufacturing complex in Montreal was redeveloped by Ghafari Associates to incorporate lean manufacturing of its CSeries aircraft.
In January 2012, the company 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. In October, 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. In November 2012, the company signed the largest deal in its history, with Swiss business jet operator VistaJet, to deliver 56 Global series jets for a total value of $3.1 billion. The deal included 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 aircraft, with options for another 18. 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. Studies underway included an environmental assessment, master planning exercise and preliminary runway design. In 2015, the Government of Canada announced that it would not approve a change to allow jets at the airport and the proposal was shelved.
In January 2014, Bombardier Inc. cut 1,700 employees from Bombardier Aerospace to save costs due to a 19 percent drop in orders in 2013. In July the same year, 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. In its 2014-year end statement, Bombardier Aerospace reported that it had reduced the number of employees by 3,700 over the year; delivered 290 aircraft and had orders for 282 more; and also claimed "strong long-term potential".
On 29 October 2015 Bombardier announced a US$4.9-billion third-quarter loss and took a $3.2 billion writedown on the CS series in the third quarter. Bombardier also said it would cancel its Learjet 85 program, taking another US$1.2-billion writedown and cancelling the 64 outstanding orders. Particularly because of the CSeries, 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.
As of 21 December 2015, the company had only 243 firm orders for the CSeries, but a US$2.5 billion cash infusion - $1 billion from the provincial government plus a $1.5 billion investment from the Caisse de dépôts et placements du Québec - was keeping the parent company adequately funded and optimistic. At that time, the federal government had not yet made a decision as to whether a grant would be provided but Prime Minister Justin Trudeau told the media on 11 December that he was well aware of the importance of the aerospace sector to the country's economy.
On 17 February 2016, Bombardier announced its 2015 profits were $138 million before taking a $5.4 billion write-down. That same week, the company also announced it would cut 7,000 jobs.
After a very long and expensive development process, costing US$5.4 billion to date, and including a US$3.2 billion writeoff, the small (110-125 seat) CS100 version of the CSeries received initial type certification from Transport Canada on 18 December 2015. 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.
Most of these were for the CS300 model. The first CS100 was expected to be flying by mid-2016 in Lufthansa colours. "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. 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 was US$71.8 million and for the CS300 US$82 million). 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 worldwide and were likely to plant the seed about discounting in the minds of potential purchasers.
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 aircraft, hoping to resell these later, without paying a sales agency fee.
In January 2016, United announced the planned purchase of 40 737-700s followed by an order of another 25 of the same planes in March. (Oddly enough, United realized several months later they actually didn't want any of these planes and converted them to four of the larger 737-800s and 61 737MAX jets.)
Marketing of the CSeries was adversely affected by production delays and stiff competition in early 2016. On 20 January, United Continental Holdings Inc. announced that it had ordered 40 Boeing 737-700s instead. Air Canada announced it would purchase up to 75 CS300s, a larger variant of the CSeries, on 17 February 2016. Prior to this announcement, there had been no orders for CSeries aircraft since 2014.
The C-series program was expected to have positive cash flow after approximately 200 aircraft are delivered. David Tyerman, an analyst with Canaccord Genuity, commented the difficulty in winning orders illustrates market difficulties faced by Bombardier and questions how profitable the next C Series order they win will be for them. According to Bjorn Fehrm of the aviation consulting firm Leeham Company, the first 15 CSeries aircraft produced in 2016 each cost Bombardier $60 million to make, but will sell for only $30 million.
Bombardier had been in negotiation with Delta Air Lines and the latter finally placed an order in April 2016 for 75 of the CS100 series models with an option for 50 additional aircraft. At full list price, the deal would total US$5.6 billion but some sources were convinced that Delta had received a significant discount. Air Canada also firmed up its tentative order for CSeries jets in late June 2016. The company ordered 45 of the CS300s with an option for another 30. Statements by the two companies indicated that the firm sale would be worth $3.8 billion, and the option would increase that to $6.3 billion if it were exercised. (However, these figures are based on the full list price of the aircraft.) Deliveries would not start until late 2019. In the meantime, negotiations were continuing with the Federal government for a subsidy of $1 billion. The next day, Bombardier delivered the first CSeries aircraft to Swiss International Air Lines which was the first to start flying them.
Comac collaboration
On 24 March 2011, Shanghai-based Commercial Aircraft Corporation of China (Comac) and Bombardier Inc. signed a framework agreement for a long-term strategic cooperation on commercial aircraft. The intention was to break the near-duopoly of Airbus and Boeing. Aircraft covered by the programme included the Bombardier CRJ-series, CSeries and Q-series; and the Comac ARJ21 and Comac C919.
Airbus partnership
On 16 October 2017, Bombardier Aerospace and Airbus announced a partnership on the CSeries program and in July 2018 Airbus acquired a 50.01% majority stake, Bombardier keeping 31% and Investissement Québec 19%, to expand in an estimated market of more than 6,000 new 100-150 seat aircraft over 20 years. As a result of this arrangement the CSeries is now marketed by Airbus as the Airbus A220. Access to Airbus's supply chain expertise is intended to save production costs while the headquarters and primary assembly line remain in Québec, while U.S. customers will benefit from a second assembly line at the existing Airbus Mobile factory in Alabama. Airbus did not pay for its share in the program, nor did it assume any debt. Airbus insists that the company has no plan to buy out Bombardier's stake in the C-series program and Bombardier would remain a strategic partner after 2025, however clauses allow it to buy out Quebec's share in 2023 and Bombardier's 7 years after the deal closes, though it also stipulates production is required to remain in Quebec until at least 2041. Bombardier CEO Alain Bellemare said the partnership would significantly accelerate sales. "It brings certainty to the future of the program so it increases the level of confidence that the aircraft is there to stay. Combining the CSeries with Airbus's global scale ... will take the CSeries program to new heights".
Government subsidy controversies
Embraer
Brazil and Canada engaged in an international, adjudicated trade dispute over government subsidies to domestic aircraft manufacturers in the late 1990s and early 2000s. The World Trade Organization decided that Brazil ran an illegal subsidy program, Proex, benefiting Brazilian manufacturer Embraer from at least 1999-2000; and that Canada illegally subsidized its indigenous regional airliner industry.
In late September 2017, the World Trade Organization announced that it would consider Brazil's complaint filed in February, including allegations that the Canadian government unfairly subsidized the CSeries. Embraer claimed that the subsidies are an "unsustainable practice that distorts the entire global market, harming competitors at the expense of Canadian taxpayers."
Boeing
On 28 April 2016, Bombardier Aerospace sold 75 CSeries CS100 firmly plus 50 options to Delta Air Lines. On 27 April 2017, Boeing filed a petition for dumping them at $19.6m each, below their $33.2m production cost.
On 9 June 2017, the US International Trade Commission (USITC) found the US industry could be threatened. On 26 September, the US Department of Commerce (DoC) observed subsidies of 220% and will collect deposits based on these. It will add a 80% preliminary anti-dumping duty on top, resulting in a total duty of 300%. The DoC announced its final ruling, a total duty of 292%, on 20 December. On 10 January 2018, the Canadian government filed a complaint at the World Trade Organisation against the USA.
On 26 January 2018, the USITC four commissioners unanimously determined the U.S. industry is not threatened and no duty orders will be issued, overturning the imposed duties. The Commission public report was made available by February 2018. On March 22, Boeing declined to appeal the ruling.
2015/2016 Government assistance
On 29 October 2015, the Quebec government announced that it would invest US $1 billion (roughly CAD $1.3 billion) to save the struggling CSeries and protect jobs in what some called a "risky gambit".
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. Media reports initially suggested that Bombardier had also asked Ottawa for a repayable loan of $350 million 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. 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. Aid was definitely essential, because the project has saddled Bombardier with debt, forcing it into a struggle to raise cash in order to keep it afloat.
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. In fact, Milke also referred to the bailout loans as "corporate welfare" in the Globe and Mail of 4 November 2015.
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. 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" but made it clear that the government's decision would be based on the best interest of Canadians, not on "emotion, politics or symbols".
Finally, in April 2016, the federal government offered an aid package to the company but as of 15 April, had not divulged the amount or conditions it imposed. On that date, some media reported that Bombardier had rejected the offer but an unnamed source advised Reuters that in fact, negotiations were still underway. On 14 April 2016, Bombardier shares were at a six month high based on rumors that Delta had ordered CSeries jets. On 28 April the order for 75 aircraft, with an option for 50 more at a later date, was confirmed by Delta. However, George Ferguson, senior airlines and aerospace analyst at Bloomberg Intelligence, told the Toronto Star that his calculations indicated that "Bombardier sold the CSeries for $4 million on average per plane less than what it costs to make".
The company continued to request a $1 billion aid package from the federal government. In mid May, news reports indicated that the federal government had offered a $1 billion aid package (in addition to the $1 billion subsidy offered by the Government of Quebec) but with a condition: that the company eliminate the dual-class share structure which enables the Bombardier and Beaudoin families to control Bombardier in spite of only a minority ownership. According to Bloomberg, the talks were at a "standstill" on 13 May because of this condition. The federal plan also recommended that the company issue new shares to gain $1 billion in additional funding.
Negotiations between the Trudeau government and Bombardier were still underway on 8 July 2016 with some wondering whether giving a billion dollars to a company that had lost $6.5 billion in two years would be a logical investment. Nonetheless, the Toronto Star predicted that the government would proceed with the bailout because bankruptcy for the company would lead to the loss of some 70,000 jobs and the loss of significant Canadian exports, which had totaled $34.2 billion in the previous five years. In May 2016 Federal Finance Minister Bill Morneau said the aerospace sector is "critically important" to Canada. In February 2017, the federal government agreed to provide Bombardier with $372.5 million in interest-free repayable loans, to be issued in instalments over the following four years. Most of that amount was intended to aid the production of the Global 7000 business aircraft; one third was intended for the CSeries.
Maps Bombardier Aerospace
Aircraft
Current business jets in production
- Learjet 40 XR
- Learjet 45 XR
- Learjet 70/75
- Bombardier Challenger 300
- Bombardier Challenger 600 series 605
- Bombardier Global Express XRS/5000/6000
- Bombardier Global 7000/8000, launched 2010, introduction in 2018/2019.
Former business jets in production
- Learjet 35
- Learjet 55
- Learjet 60 XR
- Learjet 85
- Bombardier Challenger 850
Current commercial jets in production
- Bombardier CRJ700 series/900/1000 (70-100 passengers)
- Airbus A220 Series (100-160 passengers), previously known as Bombardier CSeries, with roots in the BRJ-X (Bombardier Regional Jet eXpansion) 80-110 seats jetliner concept.
Former commercial jets in production
- Bombardier CRJ200/100 (50 passengers)
Current turboprops in production
- Bombardier Dash 8 Q400
Former turboprops in production
- CL-415
- Short 330
- Short 360
Military aircraft
- Short Tucano
Unmanned aerial vehicles
- Bombardier CL-327 Guardian
Current facilities
Bombardier Aerospace has manufacturing, engineering and services facilities in 27 countries. The production facilities are located in Canada, the United States, the United Kingdom (Northern Ireland), Mexico and Morocco.
On May 3, 2018, Bombardier announced the sale of its Toronto Downsview facility where it manufactures the Global business jet family and the Q400 regional turboprops for $635 million, leased back for three to five years to maintain Q400 production, while a 38 acres (15 ha) site is leased at Toronto Pearson International Airport to open a final assembly plant for the Global business jets.
- Canada
- Montreal Trudeau International Airport - Headquarters. Challenger 300, 605 and 850 final assembly and flight test. Global family interior completion.
- Montréal Mirabel International Airport - CRJ700/CRJ900/CRJ1000 and A220 family final assembly and flight test.
- Saint-Laurent, Quebec - Product Development Centre. Cockpit and aft fuselage manufacturing facility.
- Downsview Airport - Bombardier Dash 8 final assembly and flight test.
- Toronto Pearson International Airport - Global family final assembly
- Mexico
- Querétaro - Aircraft component manufacturing facility for Learjet 85, Challenger 605, CRJ700/CRJ900/CRJ1000 NextGen, Q400 NextGen and Global 6000/7000.
- Morocco
- Casablanca - Flight controls for CRJ series aircraft.
- United Kingdom
- Belfast, Northern Ireland - Aircraft fuselage, engine nacelle, wing manufacturing and assembly facility.
- United States
- Wichita, Kansas - Learjet family final assembly and flight test.
Former facilities
- Canada
- North Bay Airport - Bombardier CL-415 was the final assembly and flight test until production ended in 2015.
Production
Bombardier Aerospace fiscal or calendar year delivery of regional, business and amphibious aircraft:
Gallery
See also
- Viking Air - Canadian manufacturer that purchased the type certificates from Bombardier for all discontinued de Havilland Canada designs.
Notes
References
- Commercial Aircraft and Airline Markings by Christopher Chant.
External links
- Bombardier Aerospace
- Learjet 85
- Exeltech aerospace Inc.
- Gregory Polek (June 26, 2018). "Bombardier Sees Return to Prominence for its Regional Lineup". AIN online.
- Jon Hemmerdinger (27 June 2018). "ANALYSIS: Bombardier returns to regional aircraft roots". Flightglobal.
Source of article : Wikipedia
0 Comments