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SUMMARY: The Bombardier G7000 is the next crisis at Bombardier, the ultra long range market for VIP aircraft above $75 million has averaged only 18 Airbus ACJ and Boeing BBJ VIP aircraft per year since the late 1990’s, so where is the market for the G7000 ? This is another crisis coming at Bombardier that has not been talked about, but competing again against Airbus and Boeing in a very small market (like the CSeries) is another recipe for even more troubles at Bombardier, when you get +100% more aircraft (volume in ft3 and cabin floor in ft2), therefore more comfort and very comparable range (if needed) with the A319ceo/neo and BBJ/BBJMax7 offering. Myopia has blinded the company’s ability to have real foresight and intellectual insight into where they are going with the G7000 and off course the CSeries and the Canadian taxpayers are suppose to bailout this Canadian tax avoiding, job discriminating and mismanaged corporation ? The 39 x Q400 orders and a few options means the line is good till July, 2019 at BEST while the 79 x CRJ orders and few options mean that line is done by May, 2018 at BEST. While the CSeries will struggle, the remaining Commercial Aircraft products are dying a slow death and no way will the 5 year Transformation Plan get to $14.9 billion in Aerospace revenue. While the ‘cash cow’ Global 5000/6000 production rates are cut further from their high of 80 in 2014 (once 43% of Aerospace revenue), there is little left in existing Commercial and Business aircraft products to sustain the company’s revenue ambitions past 2020. The G7000 is heading in the same direction as the CSeries, into a small market segment dominated by the duopoly of Airbus and Boeing, where margins are very low to nil, low demand and low margins combined will create an eventual financial meltdown. Bombardier just got it all wrong, and you cannot change the market, it is what it is. Lastly, Canadian taxpayers will soon have “invested” $C 2.0 billion to own 2/3 of the CSeries program that is destined for failure, a program that Airbus, Boeing and Embraer did not want to buy, but our “corporate welfare” program will ensure that Bombardier cleans up it’s financials by dumping the program into a separate limited corporation that we Canadians will be stuck with, hell or high water. While Canada’s government runs up a huge $C 30+ billion budget deficit and will surely cut back on many programs for Canadians, yet support Bombardier at all cost, as we sadly already have +25% of our children in Toronto and Montreal living below the poverty line. But off course saving Quebec (which had 7 high profile politicians arrested just last week as its massive corruption culture is further exposed to the world) based Bombardier (where the Liberals have 40 seats and the Prime Minister’s home province) is more important politically than looking after down and out Canadians.

I have covered Bombardier’s problems with the CSeries a great deal over the past 3 years, and anyone who has read the articles should by now know that I have been accurate with my predictions of low sales, becoming a ‘penny’ stock, President/CEO Pierre Beaudoin’s move up but unfortunately not out to predicting that Bombardier … Continue reading

UPDATE: The Canadian government is going to put $C 1.3 billion into ailing Bombardier and BAILOUT its CSeries commercial jet program, yet the company AND the Canadian government are NOT revealing past government aid to the manufacturer. In fact, according to latest article in the ‘Financial Post’ both parties suppress any information about Canadian taxpayers support for the company, which in a democracy like Canada’s is outrageous. This is another example of the “corporate welfare” and “crony capitalism” in Canada today, when government and BIG business are bed fellows and there is no public accountability and transparency on billions of dollars of taxpayers money going to aerospace companies. When did we become a “crony state” where taxpayers are not allowed to know where their tax money went to and for what ? They say it could prejudice the competitive position of the company ? are you kidding me ? Everyone knows what a miserable screw-up Bombardier is today thanks to ex-President/CEO and now Executive Chairman Pierre Beaudoin. They tried to sell the CSeries program to 3 OEM’s in October, 2015 surely they gave out financial information on the CSeries program ? and everyone can read public financial statements to see how bad the company’s financials are. Yet, the company is NOT a good Canadian citizen, it hides and parks hundreds of millions of dollars away from our Canada Revenue Agency (CRA), in overseas brass plate corporations so it does not have to pay Canadian taxes that it now so badly needs from us, and has asked 51 times since 1966 for government assistance, that is an average of once a year for the past 50 years, a ‘regular customer’ for state aid and yet Bombardier goes out of its way to unethically hide its money from Canadian taxes yet dares to ask for state aid regularly to help it grow ! shameful corporate hypocrisy at its worst. It discriminates in its employment hiring against English speakers (aka Quebecois nepotism coming from ex-President/CEO directly) and the government has done nothing yet to investigate it, as it is against the Canadian Human Rights Act to discriminate and the company needs to be punished for that. The company sends new work to Mexico and Morocco, as it lays-off thousands of workers in Canada and it wants more and more money from Canadian taxpayers while the Bombardier and Beaudoin family’s that control 54% of the voting shares with only 13% of equity (worth around $US 345 million), don’t want to give up control, thinking they are too BIG to fail ! Probably they are right, off course local Quebec government made no such request of course (wonder why ?), Ottawa is at least trying to change the 2 tier voting system to reduce majority control. If you want taxpayers money, then you have to make it transparent, it is simple. If you don’t want your competitors to know you are being state subsidized and probably running foul of World Trade Organization (WTO) rules, then don’t take taxpayers money and find it elsewhere. After the revelations of Quebec’s Charbonneau Commission into widespread corruption in Quebec, mainly between BIG business and local politicians, I believe that with billions of dollars of taxpayers money out there somewhere and no accountability for it, our RCMP (Royal Canadian Mounted Police) must investigate, as this is how corruption happens in “crony capitalism”, when government and BIG business do their own things behind the closed curtains free of public scrutiny and accountability, especially in Quebec, so let’s get in there and find the money trail before its gone ! Lastly, if the control stays with the existing 2 families, Ottawa must say NO to any further state aid (aka “corporate welfare”), the $C 1.3 billion investment into a new limited partnership that will hold the CSeries program, is scam on the taxpayers of Canada, as Bombardier very well knows that the demand in the 100 to 150 seat market is very low with 9 years of steady decline and only 53 deliveries in that segment in 2015 by 3 manufacturers. Bombardier only has to look at it’s own 104 seat CRJ-1000 program a total commercial FAILURE with only 68 orders and 43 deliveries in 5+ years (only 4 deliveries and a $243 million write down on the program in 2015), add to this the new ‘normal’ on pricing deals in this 100-150 seat segment is now at 50% to 70% off list price, and it all adds up to a market segment that is totally wrong for the likes of a lightweight competitors like Bombardier due to weak demand and low to non-existing profit margins on sales, against the duopoly of Airbus and Boeing determined to crush the CSeries early on. This explains why they wanted to sell it 1 month before Canadian Certification, why else would you sell a program after 8 years of work ? They know where it is all heading and secretly they don’t believe in the program as it has NO FUTURE given the dynamics of what is happening in the market segment today. Canadian taxpayers are being duped into a $C 2.0 billion “investment” that has ZERO chance of being returned, better to buy 91% of all outstanding ‘B’ shares, and have something to show for the $C 2.0 billion. Lastly, when the CSeries becomes and orphan, it will not be the first Canadian jet airliner to fail, I take a quick look at the 1949 built Avro Canada C102 Jetliner, and 3 other jet airliner programs that were very good for there time, but like the CSeries were in the wrong market segment at the wrong time and failed with less than 37 units produced before becoming “orphans” (aircraft who have ‘lost’ their manufacturer or were ‘abandoned’ by their manufacturer).

I have recently written about the hundreds of millions of dollars of Canadian tax payers money Canadair and de Havilland received from the Canadian government in the 1980’s, and that Bombardier now wants $C 1.3 billion from Ottawa to match the $C 1.3 billion it has received from Quebec. For a company that violates the … Continue reading

UPDATE: Bombardier could not sell/dump the CSeries program to Airbus, Boeing or Embraer last year, but it has found a buyer (aka sucker) in the Province of Quebec and most likely the Canadian Federal Government. The two Governments will together invest (aka “throwing taxpayers money out the window”) $C 2.0 billion for what the Prime Minister naively calls a “superlative” (unrivaled/marvelous) aircraft ? that for all it’s acclaim of “game changing” greatness has only 243 orders since 2009 of which 100+ are “dubious” orders from questionable customers that will most likely not happen. If the CSeries is so “great”, why are airlines not buying it ? yet buying the new Embraer E2’s at a much faster rate ? The CSeries is positioned in the 100-150 seat market segment, which has been in a steady decline for the past 9 years now, and had only 53 deliveries last year by 3 OEM’s. This latest call for government assistance is the 51st request by Bombardier since 1966 which can only be called “corporate welfare” or “crony capitalism”, yet Bombardier is still 54% controlled by 2 families with only 13% of the shares, and no interest to put in more money into their own struggling company or willing to lose majority control, yet one of their own, Executive Chairman Pierre Beaudoin, mismanaged the company so badly and wiped away billions of dollars of investors money as the stock value plummeted and billions in corporate net losses accumulated since taking the helm in June, 2008. But thanks to Canadian taxpayers the company and it’s owners will be saved for a little longer as the CSeries will be put into a new limited partnership with its own CEO/President, which will shelter Bombardier financials from the eventual collapse of the program, a great set up for Bombardier, and a major rip off for Canadian taxpayers, again. A better solution would be to take the $2 billion and buy shares in Bombardier directly, which today would get you 1.739 billion ‘B’ shares or 91% of all outstanding ‘B’ shares, at least taxpayers would have a majority ownership in the total Bombardier business which is better than owning the eventual “orphaned” CSeries program, and have nothing to show for it in the end. The current 100 to 150 seat market’s low demand and low pricing (United got $23 million per B737-700 recently) cannot profitably sustain all the players, from Bombardier’s new CS100/300 the Boeing B737-Max7, Airbus A319neo and the Embraer E190/195-E2’s, so who will be the loser ? The Canadian taxpayer off course ! The Bombardier forecast of 7,000 units over 20 years is total BS, garbage in, garbage out as in the last 10 years, only 1,879 deliveries were made in this segment (188 per year average) by 3 OEM’s, now there are 4 OEM’s in this segment with price discounts off list price +50% being the new normal, as Airbus and Boeing are determined to crush Bombardier’s entry into their ‘turf’. Bombardier’s 104 seat CRJ-1000 should be a RED Flag on this market segment, 6 years into the program and only 70 orders (now less with some cancellations) and only 45 deliveries and a very low backlog, with a $243 million write off last year in anticipation that it’s days are soon over. There is a disaster in the making, as very LOW DEMAND combined with very LOW PRICES equals very low or non existing PROFIT MARGINS for Bombardier, which it cannot afford as it will be totally dependent on the CSeries in a few years as its own CRJ and Q400 line are both in the declining stage of their life cycle. I am convinced Bombardier knows the program is a dead end, and that is why they tried to sell it in October, 2015 only 1 month before Canadian Type Certification, does that makes sense anyway ? Now what airline wants to buy an aircraft which has a 25 year life from an OEM that only 5 months was looking to dump it on anyone ?

I expect the Canadian government to give into Quebec’s pressures and provide Bombardier with a bail out of $1.0 billion for a 1/3 share in the CSeries program, joining Quebec which has already committed to invest $1.0 billion into the program , that many experts, including myself believe will fail miserably. This money will be … Continue reading

UPDATE: VLM Airlines says NYET to the once planned 14 x Russian Sukhoi SSJ-100’s SuperJet’s, due to potential certification and geopolitical risks, which I have been talking about for some time. It took a new CEO Hamish Davidson to see things clearly, the SSJ-100 program is in BIG trouble, 102 manufactured and 35+ “white tails” sitting and waiting in the cold for a buyer or lessee, basically any airline with a pulse and in desperate need of 80-90 seat regional jets. The aircraft are going to Russian airlines off course and then to very financially weak and desperate airlines outside of Russia like Thailand’s Kan Air, which recently was one of 4 airlines in Thailand identified by it’s CAA as having safety concerns due to high debt loads. While another SSJ-100 customer, Bek Air (Kazakstan) sues it’s CAA because it does not want to undertake a compulsory IOSA (IATA Operational Safety Audit) ? Other than InterJet (Mexico) the foreign customers of the SSJ-100 have been very weak airlines most have gone bankrupt operating the SSJ100 or just waiting for the SSJ100 to arrive, not sure which is worst, either way, financial condition of the operating carrier is obviously not a major criteria at SuperJet International. The list of failed Sukhoi “customers” is pretty long for a 5 year old program, from Armavia (Armenia), Moskovia (Russia), Air Armenia, Sky Aviation (Indonesia), Lao Central Airlines (Laos) Kartika Airlines (Indonesia), while Blue Panorama (Italy) just cancelled it’s order. Airline executives should not take big risks with their airlines, the SSJ100 has many risks, political, economical, customer perception to operational. Finally, Russia’s Prime Minister Medvedev “wonders whether it is 2016 or 1962 ?” as the “New Cold War” is on according to him, meanwhile many Europeans wonder if it is not 1938-1941 all over again with 3 internationally recognized independent countries (Georgia, Moldova and Ukraine) now having had part of their territory annexed by force in the past 20 years by Russia, who is next ? Estonia ? Latvia ? Lithuania ? it is time for tougher economic sanctions on Russia that include Sukhoi and it’s commercial aircraft program, the SSJ-100, wake up Europe, because it is 1938 all over again, will history repeat itself ?

In a smart move, Begium’s VLM Airlines is backing away from its planned acquisition of 14 x Sukhoi SSJ-100-95LR Superjets (4 lease options + 10 purchase rights), due to certification concerns and geopolitical issues between the West and Russia. This is what I have been talking about in my previous articles on the SSJ-100, the … Continue reading