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PRESENTATION: Finding the elusive sustainable airline business model in the Caribbean, a large graveyard for regional airlines for decades. The region has a great deal of potential, but government taxes (up to 100% of net ticket price) play havoc with passenger demand, poor intra regional connectivity and government protection for state subsidized airlines (LIAT, Caribbean Airlines, Bahamasair, Cayman Airways) limits any real competition. Time for real Open Skies, allowing freedom to serve any route by appropriately licensed carrier, and governments to get out of the airline business, and stop taxing airline tickets to the point where tourist traffic is 1/3 of what it was 10 years ago, the whole idea is to get tourist to the islands and then tax them, rather than tax them to death on airline tickets as they then chose other destinations to travel to, its all backwards. LIAT flies 35% of its routes on money losing “social routes” with ATR-72/42’s, time to get small regionals with 15-19 passenger turboprops to compliment and even replace LIAT services on money losing routes, frees up ATR capacity for money making routes and reduces or eliminates loses on “social routes”. Time for a more intelligent approach on air transport and air connectivity in the region, where tourism is still struggling after 8 years, and it is tourism that drives the economies in the Caribbean.

I attended the Carib Avia’s 1st annual Caribbean Aviation Meetup between June 14-16, 2016 in Roseau the capital city of the beautiful Commonwealth of Dominica, and attached is the 2 hour presentation from the Conference. The Presentation covers airlines that have gone bust, regional aircraft, multi-government owned airlines, airline business models, regional airline valuations to … Continue reading

SUMMARY: Bombardier’s rise to become the 3rd largest Commercial Aircraft manufacturer in the world, was due to 4 acquisitions between 1986 and 1992 (1986-Canadair, 1989-Shorts Brothers, 1990-Learjet and 1992-de Havilland), with all but one using billions of Canadian and UK taxpayers money and lots of political help (aka cronyism) to make it happen. The story behind the acquisition headlines, with their give away low acquisition costs, billions in written off aircraft programs, state subsidies and hidden airports that were later sold at big profits, all kept from public eyes. Bombardier’s current product line is 30+ years old, with the 1980’s Challenger CL-600 business jet (now Challenger 650 still in production) from which a family of CRJ regional jet airliners came from, while the early 1980’s 37 passenger DHC-8 is still produced as the 90 passenger Q400. The CSeries is Bombardier first new commercial airliner since it entered the aerospace industry 30 years ago in 6 short years. Contrary to Bombardier’s PR BS, Bombardier is definitely NOT an innovator, just excellent at low risk, low development programs that just stretched existing aircraft, like 12 passenger Challenger CL-600 business jet into the 104 passenger CRJ1000 and the DHC-8-100 into the high density 90 passenger Q400. Attached to the bottom of this article is an paper entitled “The Rise and Fall of Bombardier” and how Bombardier REALLY become an Aerospace power house. The CSeries program is still suffering, Air Canada was enticed to buy by Quebec dropping a long disputed lawsuit against Air Canada and Ottawa offered changes to some legislation, only last weak Air Canada threatened to walk away from the deal as Ottawa had not moved on the legislative changes, and even stated the obvious that “there are other alternatives other than the CSeries”, proving it bought not because it was an aircraft it had to have or needed, but because it was politically coerced to make a deal in crony capitalist Quebec, where politicians and big business are all in bed together to screw Canadian taxpayers, and enrich a few. Meanwhile, the 75 x CS100 Delta Air Lines deal was good for an order WIN, yet the deal is expected to lose $525 million ($7 million per aircraft), and is nothing but a money LOSER deal. Is this the ONLY way Bombardier can sell the CSeries ? through political coercian or selling below cost ? if so then the game will be over soon for the program. But why is the stock up from February’s $0.77 a share ? business deliveries will be off by 25% this year, the Q400 is down to 42 orders in backlog and dying while the CRJ line has 86 in backlog (with 23 x CRJ1000 questionable) and dying as well, high end Global business jet demand is down, while the CSeries even with the Delta and Air Canada deals has only 330 orders (with +25% of existing orders HIGHLY questionable) after 8 years of sales effort ? and with all existing orders currently at a loss, loses are expected well into 2021. Bombardier the world’s only plane and train manufacturer can’t deliver trains on time ! so NO reason to be optimistic, other than the fact Bombardier looks set to DUMP the Cseries program on naive Canadian taxpayers for $2.0 billion for a 2/3 ownership, and raise another $1.0 billion in new stock offering for the new partnership called CSeries Aircraft Limited Partnership (CSALP). Bombardier failed to find a buyer last fall for the CSeries, but now thanks to crony capitalism in Canada, Canadian taxpayers have been suckered into owning the program that NO other aerospace company wanted 9 months ago. Bombardier will get the program off its books and collect $3.0 billion in new capital after writing off $3.2 billion in the CSeries program in 2015. Now the program will be a Canadian government program, and will draw fire from the WTO and the US for state aid, illegal and prohibited subsidies and price dumping, the saga is just beginning and no light at the end of the tunnel for the CSeries.

To my regular readers, I apologize for not writing in the past 6 weeks, been busy with several airline projects in the developing world, but I am back and still not seeing anything positive about the CSeries. Let’s see if Farnborough International Airshow (June 11-17) has anything new from Bombardier, other than the announcement of … Continue reading