Bombardier Aerospace

Bombardier Aerospace

Type	Subsidiary
Industry	Aerospace
Predecessor	Canadair
Headquarters	Dorval, Quebec, Canada
Area served	Worldwide
Products	Aircraft
Revenue	$10.5 billion (2014)
Number of employees	34,100, at year end 2014
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.

History

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.

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 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, which would make it still about 8% more fuel efficient than the Boeing 737 Max scheduled for introduction 3 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. The manufacturing complex in Montreal will be redeveloped by Ghafari Associates to incorporate lean manufacturing of its CSeries aircraft.

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.

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.

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.

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.

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. 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.

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.

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. 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".

On October 29, 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 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. 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.

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. 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 latter is expected to receive certification in approximately six months. The first CS100 is 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 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.

Government assistance

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 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 to 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 November 4, 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".

Government subsidy controversy

Main article: Bombardier Aerospace and Embraer S.A. government subsidy controversy

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

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.

Products included in the programme include:

• Bombardier CRJ-series
• Bombardier CSeries
• Bombardier Q-series
• Comac ARJ21
• Comac C919

Aircraft

Business jets

• Learjet 35
• Learjet 55
• Bombardier Learjet 40 XR
• Bombardier Learjet 45 XR
• Bombardier Learjet 60 XR
• Bombardier Learjet 70
• Bombardier Learjet 75
• Bombardier Learjet 85
• Bombardier Challenger 300
• Bombardier Challenger 30X
• Bombardier Challenger 605
• Bombardier Challenger 850

Bombardier Global family

Bombardier Global landing at Montreal International Airport

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

• Bombardier Global 5000
• Bombardier Global Express XRS
• Bombardier Global 5000 (with Global Vision Flightdeck)
• Bombardier Global 6000
• Bombardier Global 7000 Entry into service 2016
• Bombardier Global 8000 Entry into service 2017

Commercial jets

Lufthansa Regional CRJ-200

Bombardier CSeries CS100 Flight Test Vehicle (FTV1) at Mirabel

• Bombardier CRJ100/CRJ200 (50 passengers)
• Bombardier CRJ700/CRJ900/CRJ1000 (70-100 passengers)
• Bombardier CSeries (100-160 passengers) Entry into service 2015

Turboprops

• Bombardier CL-215 (radial piston, not turbo prop)
• Bombardier CL-415
• DHC Dash 8/Bombardier QSeries
• Short 330
• Short 360

Cancelled Concepts

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

Military Aircraft

• Short Tucano

Unmanned Aerial Vehicles

• Bombardier CL-327 Guardian

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) and Mexico.

• 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 CSeries final assembly and flight test.
• Saint-Laurent, Quebec - Product Development Centre. Cockpit and aft fuselage manufacturing facility.
• Wichita, Kansas - Learjet family final assembly and flight test.
• Downsview Airport - Bombardier Dash 8 and Global family final assembly and flight test.
• North Bay Airport - Bombardier CL-415 final assembly and flight test.
• Querétaro, Mexico - Aircraft component manufacturing facility for Learjet 85, Challenger 605, CRJ700/CRJ900/CRJ1000 NextGen, Q400 NextGen and Global 6000/7000.
• Belfast, Northern Ireland - Aircraft fuselage, engine nacelle, wing manufacturing and assembly facility.
• Casablanca, Morocco - Flight controls for CRJ planes.

Production

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	370	298	324	329	337	326	361	353	302	244	245	233	238	290
Net orders									363	698	367	11	201	249	481	388	282

Gallery

• 

  Q400 turboprop regional airliner

• 

  CL-215 aerial firefighting water bomber

• 

  CL-415 aerial firefighting water bomber

• 

  CRJ 200 regional jet

• 

  Challenger 300 business jet

• 

  CSeries Model

• 

  Learjet 40 business jet

See also

• Canadair - predecessor aerospace company (once part of Canadian Vickers and General Dynamics) acquired by Bombardier Inc. that became the core of Bombardier Aerospace
• de Havilland Canada - former Canadian unit of the British de Havilland Aircraft Company and later as part of Boeing
• Viking Air - Canadian manufacturer that purchased the type certificates from Bombardier for all discontinued de Havilland Canada designs (except for the Dash 8 Series 400), allowing Viking to build and sell them
• Learjet - American company now subsidiary of Bombardier

References

• Commercial Aircraft and Airline Markings by Christopher Chant.

External links

• Bombardier Aerospace
• Learjet 85 website
• Bombardier Business Aircraft
• Bombardier Regional Aircraft
• Exeltech aerospace Inc.