Bombardier's uncertain future

[pelmet]

http://aviationweek.com/commercial-avia ... ldname--id~~

Opinion: Bombardier's Uncertain Future

Spring and summer setbacks leave many open questions about the airframer’s direction

Sep 1, 2014 Richard Aboulafia | Aviation Week & Space Technology



Bombardier has endured a summer that can be characterized as a series of serious cuts. The setbacks and wounds raise difficult questions about the company’s future.

•In late May, an engine failure grounded the CSeries test fleet. It remains grounded. The company has not announced a new certification schedule, but hopes for a 2015 service entry are fading fast. The grounding kept the plane from flying to the Farnborough air show. The CSeries (see photo) has had minimal sales at every show since 2008. This one was no exception.

•Also in May, Republic Airways, one of only three airlines of any note in the CSeries orderbook, admitted it was reviewing its order, and that its 40 CS300 orders were no longer a priority.

•Embraer’s E2 series, a CSeries competitor, continued to bring in scores of orders at Farnborough. Even though it’s five years younger than the CSeries, the E2 orderbook is now larger, and with better quality orders.

•Bombardier’s plans to build Dash 8 Q400 turboprops in Russia began to unravel due to tensions over Ukraine and Western sanctions. The Russian agreement was seen as a way to restore the Q400’s badly deteriorating market situation. The competing ATR turboprop series has outsold the Q400 by a greater than 4-1 ratio over the past five years.

•Bombardier announced it may review priorities for the all-new composite Lear 85 business jet, once expected to enter service in 2013 and rumored to be facing serious technical problems. It may be delayed, to allow Global 7000/8000 deliveries to begin on time. Since the new Global series will not enter service until 2016 and 2017, respectively, the Lear 85 might not see deliveries until later in the decade.

•Also earlier this summer, the company reorganized, eliminating 1,800 jobs, and firing several key executives including Bombardier Aerospace President and Chief Operating Officer Guy Hachey and commercial aircraft marketing head Philippe Poutissou. This latest bloodletting follows the loss of many other key CSeries personnel. Since airline customers like to see stability in an all-new aircraft program (particularly one from a new producer in a segment), the changes appear to be born of desperation rather than strategy.

Some of the company’s travails result from bad luck, or are the inevitable consequences of being a first adopter of new technology. But most of the problems result from the financial obligations associated with the CSeries. Developing a large jet was always a big risk for a medium-size aircraft prime. The CSeries’s inevitable problems and delays are depriving the company’s other aircraft lines of resources needed for product development. They are also damaging the company’s commercial competitiveness across the board.

Bombardier’s litany of horrors this summer augurs worse to come. The company’s debt ratios and balance sheet are considerably weaker than for any other major aerospace company. If there are further delays to the CSeries, Bombardier’s ability to bring the jet to market may be questionable. There is little margin for error, and the company’s refusal to provide a new timetable is concerning.

If there is a silver lining in all of this, it’s the CSeries itself. It offers some impressive new technologies and was the first single-aisle jet to include advanced composite primary structures and Pratt & Whitney’s geared turbofan. It should have been the first next-generation single-aisle to reach the market, which could have been a key advantage. And it still is the best dedicated 110-130-seat jet.

But all network carriers need to operate a large regional jet such as an E2 and a 150-200 seat trunkliner like an Airbus A320neo or Boeing 737 MAX. To incentivize network airlines to operate a third type of single-aisle jet for size optimization, Bombardier needs to be much more commercially aggressive than it has been or—looking at its finances—more commercially aggressive than it can afford to be.

Bombardier’s new organization divides its aerospace division into three units: business aircraft, commercial aircraft, and aerostructures and engineering services. If, as some have theorized, the reorganization is intended to allow Bombardier the option of selling its commercial unit, then there’s the big question of who would be able to buy it and keep the CSeries going. China is the only apparent possibility, but that country has no track record of ever paying for meaningful aviation intellectual property and has had ample opportunity to acquire it in the past.

When Bombardier launched the CSeries, Airbus vowed to crush it. In many ways, the CSeries has been a test of strength for the jetliner duopoly. By reacting with the reengined A320 and 737 series jets, and with help from Embraer, the duopoly has effectively struck back. If Bombardier falters with the CSeries, and if it can’t sell its commercial aerospace unit, the duopoly will have prevailed again.

Contributing columnist Richard Aboulafia is vice president of analysis at Teal Group. He is based in Washington

[xchox]

I've said it before, and I'll say it again, Fairchild/Dornier's 728 had more firm orders, and the aircraft was at Taxi Trials when that project went kaput. C-Series is a monumental uphill battle, and I personally feel that this article is bang on.

And Rekkof is looking at starting Fokker 120 production as well. I would say that it has a high probability of happening given that the Fokker 100 is already certified around the world. The F120 would most likely be some ammended paper work. http://www.rekkof.nl

EDIT: Regarding the F120... Think about what they have done in the past F.27 -> F.50 and F.28 -> F-70.F-100.

[Chris M]

The problem isn't the CSeries, the problem is with Bombardier's poor communication and marketing. Among other things. For the past 4 months the plane has been grounded but expected to resume flights "in the coming weeks". It's been a lot of coming weeks since then. Everybody knows there are issues that aren't being spoken of, and the longer that goes on the more investors and airlines will lose faith.

Here's an interesting article that hits the nail on the head with regards to some of the corporate culture at Bombardier:

http://aviationdoctor.wordpress.com/201 ... assed-5-y/

[xchox]

Here's an interesting article that hits the nail on the head with regards to some of the corporate culture at Bombardier:

http://aviationdoctor.wordpress.com/201 ... assed-5-y/

Bang on!

[Jack Klumpus]

That Fokker 120's colour is eerily similar to jetsgos colour scheme :$

[leftoftrack]

If building a new airplane was easy everyone would be doing it.

Fokker did one thing and one thing only (building airplanes) when that hit some snags they had no other resources and had to shut the program down. The commercial aircraft sector is just a small part of their business and while they are having issues they have the resources in the rail sector to support the aircraft sector (they are the Boeing of the rail sector). As for clean sheet designs, neither the Lear 85 nor the global 7000 or 8000 is a clean sheet.

This time next year they should be well into the certification of the CS300 looking at starting major work on the CS500 as that is what the wing is optimized for and thinking about a CS700 and CS900

[Chris M]

As for clean sheet designs, neither the Lear 85 nor the global 7000 or 8000 is a clean sheet.

Define clean sheet design. The Global may look like it's siblings but as of a few months back the only parts that the 5/6000 and 7/8000 have in common (other than fasteners and the like) is two of the nose gear doors. Not a single piece of metal or composite beyond those two is shared. As for the Lear... How is that not a clean sheet?

[leftoftrack]

As for clean sheet designs, neither the Lear 85 nor the global 7000 or 8000 is a clean sheet.

Define clean sheet design. The Global may look like it's siblings but as of a few months back the only parts that the 5/6000 and 7/8000 have in common (other than fasteners and the like) is two of the nose gear doors. Not a single piece of metal or composite beyond those two is shared. As for the Lear... How is that not a clean sheet?

He went on to explain a little about the thought processes, and how the Learjet 85 came about. “The Learjet 45 was a clean sheet design and a far better aircraft objectively than the Citation XL which has been evolved over decades. The cabin of the ‘45 is not stand-up, whereas the XL is perceived to be stand up.

“So I said to Bombardier, why don’t we build a stand-up fuselage for the Lear 45 which could have the same wing, the same structure, and the same systems? The supply chain would be of minimal impact. Bombardier started looking at our technology, and realized that we could do that, and then I suggested ‘why don’t we do the whole darn thing’.”

[WhiskeyWhiskey]

As for clean sheet designs, neither the Lear 85 nor the global 7000 or 8000 is a clean sheet.

Define clean sheet design. The Global may look like it's siblings but as of a few months back the only parts that the 5/6000 and 7/8000 have in common (other than fasteners and the like) is two of the nose gear doors. Not a single piece of metal or composite beyond those two is shared. As for the Lear... How is that not a clean sheet?

The C-Series is the first and only clean sheet design Bombardier has made.

Even their rail products are all expansions and updates from Hawker Siddeley.

[xchox]

As for clean sheet designs, neither the Lear 85 nor the global 7000 or 8000 is a clean sheet.

Define clean sheet design. The Global may look like it's siblings but as of a few months back the only parts that the 5/6000 and 7/8000 have in common (other than fasteners and the like) is two of the nose gear doors. Not a single piece of metal or composite beyond those two is shared. As for the Lear... How is that not a clean sheet?

The C-Series is the first and only clean sheet design Bombardier has made.

Even their rail products are all expansions and updates from Hawker Siddeley.

Running that thin line between Manufacturer and Holding Company. Lol

[CID]

Those that are stating that the Lear 85, Global 7000/8000 and the C-Series are not "clean sheet" designs, don't have a clue.

And how about the Challenger 300/350? And to a very high degree the entire Global line? Do you remember seeing those wings or those avionics or engines on previous Bombardier equipment?

With respect the the lead stories, it's easy to find some speculator spouting negativity about the future of any large publicly traded company.

[watermeth]

http://www.flightglobal.com/news/articl ... er-403398/

Resuming flight testing.

As for the article, aviation is full of consultants with tons of experience and little to unknown achievements, shoulders decorated of titles and honorific club's golden medals like newly appointed generals lost in the jungle...

[L-1011]

Those that are stating that the Lear 85, Global 7000/8000 and the C-Series are not "clean sheet" designs, don't have a clue.

And how about the Challenger 300/350? And to a very high degree the entire Global line? Do you remember seeing those wings or those avionics or engines on previous Bombardier equipment?

With respect the the lead stories, it's easy to find some speculator spouting negativity about the future of any large publicly traded company.

I think what those guys are getting at is: If you look at the prints at all the aircraft with the exception of the C-Series... You will see DeHavilland, Canadair, Learjet etc in it.

You bring up the Challenger 300/350 which shares quite a bit with the Canadair Challenger... which in turn was originally a design by Bill Lear (Learjet) which was originally going to be called the Learstar.

I do believe the C-Series is the first true "Clean Sheet" design by Bombardier.

[CID]

L1011, the 300/350 is completely different than the Challenger 604/605. The 300 is about as "clean sheet" as you can get. And I guess you've never heard of the Lear 45? Also a clean sheet design.

And the Lear 85 may "look" like a Learjet that's where the similarity ends. It's like saying the Beech Starship is just a KingAir.

[Mach1]

I've said it before, and I'll say it again, Fairchild/Dornier's 728 had more firm orders, and the aircraft was at Taxi Trials when that project went kaput. C-Series is a monumental uphill battle, and I personally feel that this article is bang on.

And Rekkof is looking at starting Fokker 120 production as well. I would say that it has a high probability of happening given that the Fokker 100 is already certified around the world. The F120 would most likely be some ammended paper work. http://www.rekkof.nl

EDIT: Regarding the F120... Think about what they have done in the past F.27 -> F.50 and F.28 -> F-70.F-100.

Hey, hey, hey... don't you worry one little bit. None of this can't be fixed without large amounts of your tax dollars going in to support this aircraft launch. There's no sum too large for Bombardier.

[xchox]

L1011, the 300/350 is completely different than the Challenger 604/605. The 300 is about as "clean sheet" as you can get. And I guess you've never heard of the Lear 45? Also a clean sheet design.

And the Lear 85 may "look" like a Learjet that's where the similarity ends. It's like saying the Beech Starship is just a KingAir.

That is like saying the NEO and MAX series will be/are "Clean Sheet" designs. I'm with L1011 on this. And not because the TriStar is my favourite airliner of all time.

[xchox]

Hey, hey, hey... don't you worry one little bit. None of this can't be fixed without large amounts of your tax dollars going in to support this aircraft launch. There's no sum too large for Bombardier.

True. And I see it happening.

[Gino Under]

Get your facts straight.
The Canadian taxpayer isn't funding the CSeries.
Besides, Bombardier pay a sh*tload of corporate taxes not to mention the tax contributions made by a rather large employee group. So, don't try to spin your crap as a one way street where Bombardier is nothing more than a corporate welfare bum.
That's not only worn out and tired stupidity, it's completely inaccurate.

We're reading many comments about Bombardier management, an aircraft program in trouble, poor sales, on and on. Blah, blah, blah.

The reality is, this aircraft has out sold many popular aircraft even before certification, including the B737. Some scoff at the sales so far. Some preach doom and gloom with the CSeries, but obviously they need to pay closer attention (if they were really interested) to what's going on.
The delay right now has to do with an ALL NEW engine. An engine Bombardier didn't design, test, or certify. Pratt and Whitney did. They have far more riding on this engine than does Bombardier. Yet, all the wise guys and aviation industry analysts seem to be ignoring one basic fact! Rare is it that Pratt are cornered by the popular press as to what's going on with their amazing new GTF engine. What happened and why is it taking so long to fix?

Bombardier need to certify an aircraft. Not just come up with a quick fix to appease the pundits and experts.

Bombardier don't make the engine. Therefore, Bombardier isn't going to "fix" the engine problem, whatever it may be. No matter what the delivery dates may be. It has to be ready and right for a safe introduction to airline service.

Pretty simple, huh?

Gino Under

[xchox]

Get your facts straight.
The Canadian taxpayer isn't funding the CSeries.
Besides, Bombardier pay a sh*tload of corporate taxes not to mention the tax contributions made by a rather large employee group. So, don't try to spin your crap as a one way street where Bombardier is nothing more than a corporate welfare bum.
That's not only worn out and tired stupidity, it's completely inaccurate.

We're reading many comments about Bombardier management, an aircraft program in trouble, poor sales, on and on. Blah, blah, blah.

The reality is, this aircraft has out sold many popular aircraft even before certification, including the B737. Some scoff at the sales so far. Some preach doom and gloom with the CSeries, but obviously they need to pay closer attention (if they were really interested) to what's going on.
The delay right now has to do with an ALL NEW engine. An engine Bombardier didn't design, test, or certify. Pratt and Whitney did. They have far more riding on this engine than does Bombardier. Yet, all the wise guys and aviation industry analysts seem to be ignoring one basic fact! Rare is it that Pratt are cornered by the popular press as to what's going on with their amazing new GTF engine. What happened and why is it taking so long to fix?

Bombardier need to certify an aircraft. Not just come up with a quick fix to appease the pundits and experts.

Bombardier don't make the engine. Therefore, Bombardier isn't going to "fix" the engine problem, whatever it may be. No matter what the delivery dates may be. It has to be ready and right for a safe introduction to airline service.

Pretty simple, huh?

Gino Under

Lockheed did not design, test, or certify the RB-211... But look at where Lockheed's commercial program is now. They were only facing 2 competitors in a size category that never existed prior. Compare that to Bombardier... Brand new aircraft going up against proven designs with the 737, A320, EJets. How many airlines currently already own those three? Fleet commonality will be a key selling point.

Sukhoi has even broken ground in the Americas with the Superjet. This is HUGE given Russia has never had success in the Americas outside of Communist Cuba. Mainly due to Embargo so for a Mexican carrier to order it is a big deal. (some components for the SJ are made in Canada) not to mention Interjet plans on or already has started flying the Superjet into the US.

Mitsubishi without a flying model already has more confirmed orders then the C-Series.

COMAC ARJ21 whose first flight was in 2008 I believe still isn't certified and still has more confirmed orders than the C-Series.

It's a saturated market Gino. I have tons of friends employed by Bombardier in Thunder Bay, at Downsview, and in Montreal. I love my BRP products, and it is in my personal best interest that the C-Series succeed.

That still does not change my view point on how disastrous this may all turn out.

and FYI: The tax payer isn't funding it directly right now... but you damn well better believe we might be if thousands more jobs become at risk.

[WhiskeyWhiskey]

Lockheed did not design, test, or certify the RB-211... But look at where Lockheed's commercial program is now. They were only facing 2 competitors in a size category that never existed prior. Compare that to Bombardier... Brand new aircraft going up against proven designs with the 737, A320, EJets. How many airlines currently already own those three? Fleet commonality will be a key selling point.

Sukhoi has even broken ground in the Americas with the Superjet. This is HUGE given Russia has never had success in the Americas outside of Communist Cuba. Mainly due to Embargo so for a Mexican carrier to order it is a big deal. (some components for the SJ are made in Canada) not to mention Interjet plans on or already has started flying the Superjet into the US.

Mitsubishi without a flying model already has more confirmed orders then the C-Series.

COMAC ARJ21 whose first flight was in 2008 I believe still isn't certified and still has more confirmed orders than the C-Series.

It's a saturated market Gino. I have tons of friends employed by Bombardier in Thunder Bay, at Downsview, and in Montreal. I love my BRP products, and it is in my personal best interest that the C-Series succeed.

That still does not change my view point on how disastrous this may all turn out.

and FYI: The tax payer isn't funding it directly right now... but you damn well better believe we might be if thousands more jobs become at risk.

+1

I was thinking about that a week ago. That we would never see an Asian or Russian civil aircraft over here. And yet the Superjet is already here and Honda is doing pretty good with their ugly duckling.

[Mach1]

Get your facts straight.
The Canadian taxpayer isn't funding the CSeries.
Besides, Bombardier pay a sh*tload of corporate taxes not to mention the tax contributions made by a rather large employee group. So, don't try to spin your crap as a one way street where Bombardier is nothing more than a corporate welfare bum.
That's not only worn out and tired stupidity, it's completely inaccurate.

We're reading many comments about Bombardier management, an aircraft program in trouble, poor sales, on and on. Blah, blah, blah.

The reality is, this aircraft has out sold many popular aircraft even before certification, including the B737. Some scoff at the sales so far. Some preach doom and gloom with the CSeries, but obviously they need to pay closer attention (if they were really interested) to what's going on.
The delay right now has to do with an ALL NEW engine. An engine Bombardier didn't design, test, or certify. Pratt and Whitney did. They have far more riding on this engine than does Bombardier. Yet, all the wise guys and aviation industry analysts seem to be ignoring one basic fact! Rare is it that Pratt are cornered by the popular press as to what's going on with their amazing new GTF engine. What happened and why is it taking so long to fix?

Bombardier need to certify an aircraft. Not just come up with a quick fix to appease the pundits and experts.

Bombardier don't make the engine. Therefore, Bombardier isn't going to "fix" the engine problem, whatever it may be. No matter what the delivery dates may be. It has to be ready and right for a safe introduction to airline service.

Pretty simple, huh?

Gino Under

Oh my, it looks like I punched someone right in the French tickler. And it wasn't funny.

[Bede]

Get your facts straight.
The Canadian taxpayer isn't funding the CSeries.
Besides, Bombardier pay a sh*tload of corporate taxes not to mention the tax contributions made by a rather large employee group. So, don't try to spin your crap as a one way street where Bombardier is nothing more than a corporate welfare bum.
That's not only worn out and tired stupidity, it's completely inaccurate.

The facts seem to suggest otherwise. ..

http://www.fraserinstitute.org/research ... fare-trap/

[watermeth]

Interesting link bede, never heard about this think-tank, only knew the conference board.
After a quick search it looks like bombardier isn't the only one to benefit those subsidies.
That kind of program has been a battle between airbus and boeing for ages, and every aerospace company receives from govt, and as CEO, you would be mad not to use it...

And comparing clean sheet programs, lets not forget that the Cseries prog is doing well compared to the 787 and 380 and delay is minimal.
Bombardier is damn right to take its time to build a product with minimal default that could play against it after delivery. For instance look at boeing: they have a dozen of 787 sitting on the ramp that nobody wants. they were the very first out of the line who didn't benefit major mods put in effect after the troubles suffered by the ANA... What's the point to hurry.

[CID]

xchox, it's obvious you have never taken a close look at a 604/605 or a 300/350. They have different wings, different fuselages, different engines, cockpits, avionics, doors, windows and different type certificates. It's fair to say that you can't use ANY parts from one to use on the other except for basic hardware. The 300/350 is not a derivative aircraft which is abundantly clear by the different type certificate. It is as clean sheet as you can get. The 300/350 doesn't even share cabin dimensions with any other Bombardier aircraft. Enter the cockpit and you will immediately notice the complete lack of overhead panel like the 604/605 has.

The CRJ line IS a derivative of the CL600 line and they share a type certificate. Much like the 737 and A320 lines which are all derivatives so it's quite silly to make those comparisons.

When you get right down to it, the 707, 727 and 737 are much more related in design. There is plenty of overlap in those aircraft and neither is a "clean sheet."

[CID]

The Fraser Institute is a right wing think tank that has spent all of it's resources thinking of ways to discredit ANY program that is not in line with their fascist views. The truth is that no major aircraft manufacturer in the world can exist without concessions from their government and in most cases it's worth every penny. On the grand scheme of things however, Bombardier is quite benign in it's dependence on tax dollars.

Airbus takes subsidies directly from the government(s). Boeing funds itself with obscene amounts of money from defense contracts, many of which never produce anything. Embraer has sales "incentives" funded by the Brazilian government. I have read and research MANY documents created and released by the Fraser Institute and tend to find them full of holes and spin.

The Fraser Institute is heavily funded by certain corporations. Who? Well you'll never see them criticize the tax dollars pouting into oil exploration....