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UPDATE: Bombardier’s 5th round of layoffs in 26 months to affect 7,000 employees, as the company posts a $5.34 billion loss after ‘special items’ like writing off part of the CSeries, Learjet 85 and the CRJ-1000 programs. Recent article in Maclean’s (8.2.2016) confirms that “Quebecois nepotism” is for real at Bombardier and it originates at the top, ex-President/CEO Pierre Beaudoin wanted only French Canadians to be hired (aka discrimination), this is the man most responsible for the current disaster at Bombardier today and who won’t go away. No Canadian company deserves Federal aid if it systematically and deliberately discriminates against any Canadian employees, simple as that. Boeing has won the 2nd round at United against the CS300, this time 25 x B737-700’s were ordered on top of last month’s for 40 x B737-700’s as it is clear that any Bombardier CS300 deals where the duopoly competes head to head with Bombardier, a win will be extremely difficult and when it happens to win one, you can bet it will be extremely costly for Bombardier (e.g. reported 60% off for latest Air Canada order), so where is the light at the end of the tunnel ? There is none, that is why they tried to sell the program in October to Airbus and Embraer, so why would any airline buy the CSeries knowing Bombardier wanted to dump it ? The 100 to 150 seat market had only 53 deliveries in 2015 ! so where is this huge 7,000 aircraft market over the next 20 years (350 units per year) market ? Airbus, Boeing and Embraer have not seen it in years, and dropped their A318 and B737-600 because it was NOT there, and even thought about dropping the A319neo and B737Max7, until Bombardier said it wants to enter the 160+ seat market with its CS500, now all bets are off. Bombardier just has to look at it’s own 100+ seat CRJ-1000, to see the that the segment is dry, for after 45 deliveries (only 25 in backlog) and now it is being slowly written off as few orders are foreseen and existing orders are cancelled, surely a RED FLAG on the 100-150 seat market segment ? No, Bombardier is determined heaven or hell to ignore all signs that go counter to it’s marketing myopia/fantasy. Oh well, their Waterloo will come, juts a matter of WHEN not IF. I will show you what happened to the 100-150 seat market in this article. Bombardier delivers 76 (44 x CRJ’s and 29 x Q400’s and the last 3 x CL415’s), and only 38 orders (25 x CRJ’s and 13 Q400’s) for a sad book to bill of only 0.50 (Embraer delivered 101 commercial jets and took in 223 firm orders, for a book to bill ratio of 2.21), while firm order backlog at Bombardier is an extremely low 79 x CRJ’s and 39 x Q400’s, at best 22 months. Business aircraft deliveries stood at 199, but new orders were 119 but cancellations were a whopping 143 ! (74 x Learjet 85’s and 69 x ??? models), for a net negative order book of 24 aircraft (can’t even do a book to bill ratio) ! has to be worrying. Air Canada’s Letter of Intent (not an order) for 45 x CS300’s plus 30 options, is not a “win” for CSeries really as Airbus, Boeing and Embraer did not compete (even though AC has 69 x B737Max8/9’s on order + 48 options/rights), in fact it was a single sourced order as Quebec drops 4 year lawsuit against Air Canada, and hence the LOI at a reported 60% off ($92.2 million) from the $82 million list price, can’t make money on the CSeries at $32.8 million a piece ! and now every airline will want 60% off ! It is obvious the Air Canada deal was a quick LOI to put some positive spin on the 2105 financials. Smells like coercion or just the “old boys” network in Montreal at play ? Just like Russia’s Aeroflot buying 50+ Sukhoi SSJ-100’s because it has to, Air Canada buys CS300’s because it indirectly has to, the market knows what is going on as do investors (Air Canada stock already low, dropped from $8.41 before the order to $7.15 today a -15% drop in a week). A new 90 seat Q400 ? yes, at a crunching 28″ pitch, great for Asians, useless in North America and Europe. Bombardier “penny stock” climbs to $1.18 today after being as low as $0.77 on February 8th, it ‘hopes’ the Federal Government will give it $1.0 billion like the local Quebec government did 4 months ago. Yet should it get any money from Canadian taxpayers, it discriminates against some Canadian workers, hides $500 million in 2014 in a “brass plate” company in dubious Luxembourg so that it can pay less Canadian taxes, announces 5 rounds of layoffs since January 21, 2014 totaling 13,950 workers, yet more work goes to Mexico and Morocco, and the families that control the company put nothing in ? and expects Government bail-outs of their firm ? while the man responsible for the mess is still Chairman of the Board ? why not help the western oil industry or the +25 % of Toronto’s and Montreal’s children, that today live below the poverty line instead ? Sounds good to me, rather help the children then the Beaudoin’s, Bombardier’s and the investors who still hang around “hoping” things will change.

Bombardier announces it’s 5th round of layoffs in 26 months, this time it is 7,000 over 2 years on top of the previous 4 rounds (21.1.14 -1,700, 23.7.14 -1,800, 21.1.15 -1,700, 11.5.15 -1,750) of 6,950 announced layoffs (total now is 13,950 in just 26 months), as it announces a mind blowing $US 5.34 billion net loss … Continue reading

UPDATE: Since 2013, Republic Airways 2010 order for 40 x Bombardier CS300s plus 40 options was a ruse by the manufacturer, as Republic sold Frontier Airlines and could not even dream of operating 130 seat airliners as a Regional CPA (capacity purchase agreement) carrier for US Major airlines, as it is limited to 76 seats by Major airline pilot scope clauses with their respective airlines. Not sure what all the fuss is about, as I explained in my previous article, that of the 288 ‘orders’ the CSeries now has (inc. LOI for 45 x CS300’s for Air Canada, not an order yet), only 155 I believe are solid orders, and 133 are ‘weak’ orders. Bombardier is desperate to reach it’s magical 300 sales, a number used since 2009 that does not mean anything, as it is surely not it’s breakeven as that is much higher, just a goal that is NOT going to be achieved by EIS (entry into service) in any real sense of the word. Bombardier now wants the Federal Government and Quebec to join it in a 1/3 share for each in the CSeries program, that will be separated from the company, to make it’s numbers look better and to get $1.0 billion from the Federal Government. I think it is a ruse on Canadians, as Bombardier itself does NOT believe in the CSeries, as recently as October they tried to sell the program at a reported very low price to Airbus and Embraer, wake people, they want out ! they know it is going to be a disaster. Otherwise why would they sell the CSeriest program just before certification after 8 years of effort ? because they see that demand is not there in the 100-150 seat market to carve out an existence with 3 other OEMs and their 4 aircraft types, plus the pricing discounts that we have witnessed in the past 2 months (United’s 65 x B737-700 deals at -71% of list price, Air Canada’s 45 x CS300’s LOI deal at -60% off list price). Predatory pricing by Airbus and Boeing will make profitability next to impossible to achieve. Low demand and low prices is a recipe for ultimate disaster for Bombardier. So, with no OEM’s interested in the CSeries, now they want to ‘dump’ the program on the Canadian taxpayer ! still looking to get out somehow. Meanwhile, the 2 families that control Bombardier do want to give up their controlling interest and don’t want to put in their money into the program, as they know the ultimate outcome will be an “orphaned aircraft”, that the hopefully for them, we the dum ass Canadian taxpayers will be stuck with it thanks to our naïve government that will take the Quebec bait. We have in the past given aerospace so much money, billions of taxpayers money went to Canadair and de Havilland, and the companies for very little. In fact Boeing in 1985 bought de Havilland for $112 million from the CDIC, yet between 1981 and 1984 we the taxpayer put in $950 million to develop the DHC-8, and then in 1992 Bombardier bought de Havilland. I say NO Federal money to Bombardier, we just don’t have it, budget deficit will be huge this year, let them swim or sink.

Republic Airways Holdings Inc. (NASDAQ:RJET) has filed for Chapter 11 bankruptcy, which is a reorganization process, but has raised concerns about the CSeries order for 40 x CS300’s from 2010 and 40 options, as the stock drops to $0.92 per share (93.7% in the past 11 months from $14.67), and market cap drops to $47 … Continue reading

SUMMARY: The 2015 General Aviation turboprop market numbers are out, with 557 aircraft (46 less than in 2014) worth $US 1.894 billion (equal to 2014 figure). Single engine turboprops were 78.5% of all deliveries (25.5% were Ag aircraft, 27.3% were pressurized singles and 25.7% were utility singles). The winners were Textron Aviation (USA) King Air line with 117 deliveries (inc. 74 x King Air 350’s), Daher (France) TBM 900 with 55 deliveries, Quest Aircraft’s (USA based, Japanese owned) Kodiak 100 with 32 deliveries. While the losers were Piaggio Aerospace (Italy based, Abu Dhabi owned) with only 3 Avanti Evo deliveries and Pacific Aerospace’s (New Zealand) PAC 750XStol with only 4 deliveries at a time the SE turboprop utility market had its best year ever with 143 deliveries worth $US 306.6 million ? New comer will be Textron Aviation’s SETP single, Mahindra Aerospace’s (Australia based, Indian owned) GA10 single utility and Evektor Aircraft (Czech Republic) EV-55 twin turbine utility. Overall a good year considering Exim Bank was shut down for awhile hurting some foreign export orders and the Euro/$US exchange has made US aircraft more expensive in Europe. Piper Aircraft (USA based, Brunei Darussalam owned) new M600 delays are worrying, its M500 deliveries are down as are it’s piston deliveries, and the ‘improvements’ to the M600 are not good enough to make it a close competitor to the likes of the TBM900, Textron’s SETP and possibly EPIC E1000. Mahindra Aerospace is struggling with its GA10 certification, 2 years behind on a rather simple stretch and Rolls Royce re-engine of it’s piston powered GA8. Meanwhile, “old” Type Certificate designs looking for a revival in their fortunes, like the Dornier Seastar (Germany/China), Turbo Mallard (USA) G-73T and Australian/Indian GA18 (ex-GAF N24A) are not looking very promising, few second chances in this business, though the Chinese continue to buy old Type Certificates in the “hopes” of reviving them, none so far have succeeded, and few if any will.

The General Aviation turboprop market in 2015 was mix of success and failures for the 9 remaining OEM’s, of which only 3 are now US owned (Textron Aviation, Air Tractor and Thrush Aircraft) and 6 owned by France, Japan, Switzerland, UAE, Brunei Darussalam and New Zealand. Two of the foreign owned companies are USA based … Continue reading

SUMMARY: Bombardier “B” shares closed at $0.89 today, a reverse stock split is badly needed to avoid the stock being ejected from Canada’s benchmark S&P/TSX composite index. A reverse stock split would reduce the number of shares and increase the stock price accordingly, so as an example a 5:1 reverse split would reduce the TSX:BBD.B outstanding shares from 1.933 billion to 386.6 million shares and increase price to 5 x todays’ price to $4.45 all else being equal. Sounds good ? well only 25 months ago (January 17, 2014) Bombardier the stock was at $4.51 at the current share price decline, another reverse share split would be needed by the end of February, 2018 ! So, I expect that a Bombardier reverse share split will have to be at least 15:1 ($12.00 to $13.35 range) to avoid future problems after the split (e.g. CHC Group). If it were not for bad news these days, there would be no news out of Bombardier. On December 8, 2015 CHC Group stock (NYSE:HELI) hit $0.234 per share, they did a 30:1 reverse split on December 11, 2015 to avoid delisting on the NYSE, and the stock immediately went to $6.55 (7% discount after the reverse split from an expected at par price of $7.02 ) and they are now out of the ‘penny stock’ category. Today (February 4, 2016), CHC Group stock (NYSE:HELI) hit $2.10 per share, or better put, $0.07 per share without the 30:1 reverse split ! it’s all just “smoke and mirrors” to hide horrible stock devaluations by company’s in serious trouble (today’s CHC Group market cap is only $8.35 million for a $1.7 billion a year, 233 helicopter operation), so things can get worst for Bombardier even after a “cosmetic” reverse share split. These are dark days for Bombardier and the offshore helicopter market and their OEM’s as well.

Well, I have been right about the Bombardier shares (TSX:BBD.B) becoming “penny stock”, said it along time ago, the writing was on the wall, but no one really paid attention to my blog and it has stayed a penny stock since January 27th when it hit $0.99, today it hit $0.89 and a continuing slide to … Continue reading

UPDATE: The French national airline, Air France is actually talking to Irish carrier CityJet (owned by Intro Aviation) about wet leasing it’s soon to arrive Russian made United Aircraft Corporation’s (UAC) Sukhoi SSJ-100-95 SuperJet, UAC is under EU/US sanctions as part of Russia’s military industrial complex. The strange thing is that after making headlines with it’s risky move to operate 25 x SSJ-100’s, CityJet will conveniently be sold before the first Sukhoi ever arrives, convenient for the seller and risky as hell for the buyer, this surely raises many “RED” flags ! This should create and outrage by many Europeans, as it benefits Russia’s emerging commercial aviation industry which seeks to compete with Airbus, and at a time when Russia and NATO relations are at their worst, and many EU nationals are suffering from the economic sanctions against Russia, as Moscow has retaliated back, especially against EU agricultural products. To have sanctions in place against Russia, while NATO is increasing it’s military budget and preparedness is a slap in the face for all EU nationals. The Dutch lost 189 nationals in the downing of MH17 in 2014, and the criminal investigation will be completed soon, and all evidence points to a Russian fired BUK within territory held by Russian supported separatist. This will require further sanctions, that must include the Russian commercial aviation industry. The Dutch and all other peace loving Europeans need to boycott and protest against Russian airliners in service with CityJet, Air France, Sky Greenland, VLM Airlines and any other western European operator. The SSJ100 is Putin’s ‘baby’ to crack open the western market for the Russian civilian aerospace industry, which till now had NOTHING to offer the west (except very good helicopters). The success of the new Irkut MC-21 greatly depends on how well the SSJ-100 opens up the western market, so far it is a disaster, +5 years 101 produced, 64 in service, 37 ‘white tails’ waiting for a home, 45 were to be built in 2015, only 17 were built, 56 were to be built in 2016 but only 20 will now be built yet 31 will be delivered (“white tails”). It is very cheap, they can’t move their product so they heavily discount it in price and state supported leases, but life cycle costs are more than just capital costs. So desperate for sales, that Russian airlines are ‘asked”Finmeccanica (Italy) through it’s Alenia Aermacchi subsidiary is obviously not happy with its 51% stake in SuperJet International the JV with Sukhoi as profitability outlook looks very bleak indeed. Time for Europeans to stand up to Russia, the annexation of Crimea was it’s 4th occupation of another sovereign state, eastern Ukraine is a mess, and short of war we need to send a message to Russia we don’t like it’s aggression, and time to say NYET to Russian products like the Sukhoi SSJ100.

Air France is negotiating with CityJet (Ireland) to wet lease several Russian Sukhoi SSJ-100’s come this summer, I find this totally unacceptable, and so should all citizens of the EU, I would urge Air France NOT to wet lease Sukhoi SSJ-100s from CityJet as it is part of the Russian Military Industrial Complex, that sees … Continue reading

SUMMARY: For the 3rd time in 32 years the Dornier Seastar amphibian is back (1st flight 1984), this time as Dornier Seawings GmbH (Germany), in a joint venture with 2 Chinese state owned companies in Wuxi, China, where the 2nd production line will be (really a 2nd line ?). After bailing out and failing to manufacture the aircraft and employ 250+ workers in Saint Jean-sur-Richelieu, Quebec as promised 4+ years ago when it was Dornier Seaplane Company of Florida, under CEO Joe Walker (ex-Adam Aircraft founder), not sure who takes the program seriously today, but the Chinese love to buy and bring home out of production aircraft, that then disappear into what I call the “Black Hole” and are never seen again. I don’t believe that much has has changed on the aircraft since I was Marketing Manager for Dornier Seastar GmbH in 1990-1991, except the 5 bladed prop versus the old 4 bladed prop, but have to give credit to Conrado Dornier for not giving up on his dream. There is a big market out there for regional seaplanes/amphibians but no aircraft, everyone makes do with costly, heavy, slow and inefficient land planes dragging big floats through the air. There has to be a better way, I have worked on several true amphibians like the Frakes G73T Turbo Mallard (Mallard Aircraft is looking for investors today) and the HU-16B/G-111, TPE-331-14 conversion, all good and usable aircraft but old designs. Diamond Aircraft (Canada) is going to build the composite airframe for Dornier, hopefully with newer composite material, and it is a boost to a Canadian OEM that has struggled since 2008 to regain it’s market position of 2007 when it delivered 471 aircraft and revenue of $185 million. Today, it’s output and revenue is +/-50% of what it did 8 years ago, it is another Canadian aircraft manufacturer trying to regain a lost market position, as it’s single engine jet VLJ, the D-JET program diverted money and attention from its core GA market, sounds familiar ? and I hear rumors that Wangfen, a Chinese company, is looking to buy Diamond Aircraft (Canada) ? Anyway, I look forward to one day seeing new amphibians that will fill a void that has not been filled since the days of flying boats, the market today is right for a revival, the Russian Beriev Be-200 has so much potential, but the Russians have NO idea how to sell a “concept” before you try and sell a “product”, that was Dornier Seastar’s problem back in 1991 when it stopped development of the Seastar, hope they have learned something the past 25 years that will make it a success this 3rd time around (3rd time around a charm ? or 3 strikes you’re out ?), we shall see.

  I read with great interest the latest news on the German 14 seat Dornier Seastar CD2 amphibious aircraft being built by Canadian based Diamond Aircraft for German based Dornier Seawings GmbH, as I was a young Marketing Manager for the program in 1990-1991 before it went it into liquidation after receiving German LBA VFR … Continue reading