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SUMMARY: Piaggio Aerospace is set on dropping its poor selling canard configured fast beauty, the Avanti Evo business turboprop aircraft and concentrate on its military derivatives the MPA (maritime patrol version) and the UAV (unmanned aerial vehicle) version, the P.1HH Hammerhead and leave the current global fleet of 219 Avanti aircraft and their current operators and owners with an “orphaned” product which now has a highly questionable future, and watch their residual values plummet . This cannot be a surprise to anyone, especially Mubadala Development the Abu Dhabi (UAE) based 100% owner of Piaggio Aerospace which for 10 years has just watched the program struggle but did little to change that. With only 12 Avanti’s delivered between 2012 and 2015, and only 1 delivery so far in 2016, the program is now a sadly a “joke” and dead in the water, too few sales now to be cost effective to produce, and now any buyer for the aircraft would be very foolish to do so. The now, Textron Aviation (formerly Beechcraft and Raytheon) King Air 350 line has outsold the Avanti 3.2 : 1 for the past 14 years (not even including the King Air 200/250’s), even though the new EVO offers 402 kts cruise and much lower noise levels, customers are just not buying the beautiful canard configure Avanti. I have said it many times, that good aircraft do not always sell well, no matter what OEM thinks of its product, sales tell the real story no matter what anyone thinks, something Bombardier needs to be reminded of with its struggling CSeries today. Now, “radical” General Aviation designs have never done well, they are innovative, sometimes offer great performance and technology, but buyers have stayed away from them, and I quickly look at some of those that have failed, from the Beechcraft Model 2000 Starship, Embraer/FMA CBA-123 Vector, LearAvia Lear Fan 2100 to the OMAC Laser 300, wonderful aircraft, impressive performance and technology, but of those only the Starship went into production, and then only 53 were built. The Piaggio Avanti is the most successful “radical” design aircraft, and yet a the King Air 350 which is a 1970’s designed and stretched aircraft, out sold the Avanti by a wide margin. Welcome to the world of General Aviation aircraft sales, where some of the “best” aircraft fail and disappear (e.g. Piper Cheyenne 400LS, Aero Commander Jetprop 980/1000) while some “mediocre” aircraft become a hit and never go away (e.g. Beechcraft King Air C90 line).

Piaggio Aerospace, 100% owned by Abu Dhabi based Mubadala Development Co. since September 15, 2015 (35% of Piaagio Aero since April, 2006), is re-positioning the company as a key supplier of defense and special mission aircraft. This just came out last month in a Industrial Plan, that calls for selling off “non-core” civilian maintenance and … Continue reading

SUMMARY: Learjet, the Bombardier business jet brand it bought (a rare Bombardier deal with NO government aid or subsidies) in 1990 for $US 75 million and took on its $US 38 million debt, is soon to be sold as Bombardier struggles with light mid-size jet sales, having only delivered 6 Learjets in the 1st 6 months of 2016. The failure of the Learjet 85 and its subsequent $2.5 billion write down, sealed the fate of Learjet, which has no chance of future sales growth and is losing value year by year with an “old” product line that struggles against the Textron XLS+ and Embraer Legacy 450 in a very “soft” demand environment, where big price discounting is the weapon of choice, especially by Embraer. After 54 years, the sun will set soon on the Learjet brand that Bill Lear started in 1962 using the Swiss P-16 fighter plane as his “inspiration” for the fast Learjet 23, and his LearStar 600 mid-size business jet concept was sold to Canadair in the late 1970’s, which ultimately became the CL-600 Challenger, the grand daddy of the current line of all CRJ regional jets (+1,836 delivered) and the current and 4th version of the 1970’s Challenger (+1,040 delivered), the CL-650 . The buyer may be Textron Aviation, Bombardier’s competitor with its new Latitude, Longitude and eventually Hemisphere lines, as the current 2,300+ Learjets out there (many for sale) still will need continued technical and maintenance support, now worth around $+300 million a year, and could possibly fetch a maximum $375 million price tag, cash that Bombardier desperately needs to reduce its $6.8 billion debt obligations between 2018-2023, so after selling its flight training to CAE in 2015, and its CL-215/415 water bomber rights to Viking Air in June of this year (no price has been published), and now it looks like the Learjet line is next. BUT it will not be the end of Bombardier’s business aviation problems, a tired and old product line (Learjets, CL-650, Global G5000/6000’s) face new products from competitors (Embraer Legacy 500, Falcon 8X, Textron Longitude and Hemisphere, Gulfstream G500/600) all smelling blood at troubled Bombardier.

CHECK OUT August 16, 2016 article on General Aviation delivery summary for 1st half of 2016.   The Learjet product line is about to end anytime soon, as Bombardier looks to sell the brand, which it bought in 1990 for $US 75 million and took on $US 38 million debt, in fact the ONLY aerospace … Continue reading

UPDATE: Transwest Air is now a fully owned subsidiary of WestWind Aviation, now there is only 1 large regional airline in Saskatchewan, and 80% owned by 2 First Nations economic development corporations (EDC’s). These First Nations EDC’s now pretty much own ALL airlines in Canada’s north, usually through Aboriginal economic development corporations (EDC’s), with a few family and corporate hold outs in the Northwest Territories, especially at Yellowknife (Summit Air, Discovery Air-Air Tindi/Great Slave Helicopters, Buffalo Airways) and in Fort Smith Northwestern Air Lease Ltd. Is this a good thing or a bad thing where First Nations own all air services in Canada’s north ? Is this the only viable exit strategy available in the north or are there “pressures” to sell to local First Nations ? and Can the EDC’s create long term financially sustainable airlines ? First Air (Makivik Corp.) and Canadian North (IDA), have tried to merge several times but each time it has failed, even though it makes lots of economic sense to do it, or is more cooperation among the EDC’s needed, like the recent cooperation between Air North and First Air ?

As to my blog of August 21, 2016, the Transwest Air deal is done and it is now a fully owned subsidiary of WestWind Aviation, which itself is owned 55% by the Athabasca Basin Development (ABD) and 25% owned Prince Albert Development Corporation (PADC), in short 80% First Nation owned with 20% owned by the … Continue reading

UPDATE: Canadian regional airline consolidation continues as the once fragmented industry starts to consolidate around a single provincial operator. After 11 months under Canada’s CCAA (+/- Chapter 11 bankruptcy/reorganization), Quebec based regional airline, Pascan Aviation is acquired by 2 senior executives in a management buyout (MBO). Meanwhile Saskatchewan based WestWind Aviation, fresh from its acquisition of Osprey Wings last November, looks to takeover its main local competitor, Saab 340 operator Transwest Air, itself the product of two old local airlines and their pioneers (Athabasca Airways of Floyd Glass and La Ronge Aviation of Pat Campling) coming together in 2000, leaving WestWind Aviation a monopoly in Saskatchewan, much like Manitoba with Perimeter Airlines, Calm Air, Keewatin Air and Bearskin Airlines, all under one ownership. Times are changing for regional airlines in Canada, as the second generation of airline owners retire or sell of the businesses that their fathers and mothers built from scratch, usually with nothing more than a single Cessna 180 aircraft. Sad to see the old names disappear, it is the “circle of life”, but the legacies of our Canadian aviation pioneers will always remain with us.

UPDATE: As I wrote this, I found out that WestWind Aviation (80% First Nation owned) has bought Transwest Air for an undisclosed amount, now only 1 airline exists in Saskatchewan, like it or not.   This is my follow up to the January 5, 2016 article “Consolidation in the Canadian Regional Airline Industry”, as the … Continue reading

SUMMARY: General Aviation aircraft deliveries for the 1st half of 2016 are down overall, with few winners, twin turboprops (King Air’s) are down 9%, single engine turboprops are down 3.1% while business jets are down 4.2%. Bombardier deliveries are down 20.6%, with Learjets off by 57% as that brand is about to be sold, while once “cash cow” Global 5000/6000’s deliveries are down by 24.3%, adding to the misery at Bombardier these days. The Piaggio Aerospace P.180 Avanti EVO has 1 delivery after only 8 deliveries since 2013, and the program is set to be cancelled by its owner Mubadala Development (UAE), putting an end to the struggling program (continuing with the military UAV Hammerhead version) which peaked in 2008 with 30 deliveries, but could never really compete with the King Air 350/25/200 line. Pacific Aerospace (New Zealand) cannot get its single engine turboprop PAC 750XStol moving and so far only 3 deliveries this year, (4 in total for 2015) even though it is a great aircraft but poor marketing and sales are killing it slowly, and with only 18 deliveries since 2013, it cannot survive much longer on such low production rates (while closest competitor Quest Kodiak 100 will see 39 deliveries this year). Like many GA companies, Pacific Aerospace is setting up an assembly line for its PAC750XStol in China in the “HOPE” things will change for the struggling company, but they won’t, China is a “black hole” for GA aircraft projects. Piper Aircraft has delivered only 8 x MA500’s this year as customers wait for the “new” M600 whose wing was failing on static load tests, and not offering the quantum leap in performance Piper needed (+14 kts, +484 nm in range, Garmin 3000 avionics with the same engine, airfield performance, cabin and limit of FL280 for an extra $US 840,000 ?) to stay competitive in the turboprop market, while a tired old product line is making the current owner (Government of Brunei) rethink its ownership. Lastly, Pilatus Aircraft is having a great year with the PC-12NG with already 38 deliveries this year versus 18 same time last year, BUT times are changing and this market dominance will end soon, as Textron Aviation introduces its PC-12NG competitor, the new $US 4.5 million Denali, a 10 seat, 285 kts cruise and 1,600 nm range single engine turboprop, powered by a new generation GE engine of 1,240 shp, 20% more fuel efficient than comparable PT6 engine. Looks like Pilatus is getting its pay back for entering the jet market with its PC-24, and you can bet the days of 70 to 100 annual deliveries of PC-12NG’s will soon be over as its “monopoly” on that segment will finally be challenged.

The General Aviation aircraft shipments for the 1st half of 2016 are out and show a disturbing situation across most segments versus 2015 numbers, as manufacturers are adjusting supply to the lower demand in most market segments. READ: BLOG OF FEBRUARY 16, 2016 ON – GENERAL AVIATION AIRCRAFT DELIVERIES IN 2015  Single engine turboprop deliveries … Continue reading

SUMMARY: Bombardier 1st Half results are out, and it is not good for Aerospace. With only 318 firm CSeries orders today and up to 95 “questionable”, the program suffers from poor sales but even worst, negative margins due to deals below cost, this cannot continue for very long. Yes, 2016 is a tough year for aircraft orders at Airbus and Boeing, and a “price war” is on ! and any big deal will require +65% off list price, which means every new order brings more loses for Bombardier. Meanwhile, CRJ line has only 66 orders in backlog (9 x CRJ-700, 36 x CRJ-900 and 21 x CRJ-1000) good for 25 months of production at the current 2.7 aircraft per month rate, while the Q400 is down to 48 in backlog (40 + 8 recent orders), good to May, 2018 at the current 2.3 aircraft per month. Big discounting under way on the Q400 and CRJ is evident in financials to boost sales, while Business Aircraft orders are slowing down, and production already 20% below last year will be reduced again soon to balance supply and demand. Nothing very promising at Bombardier Aerospace, the company struggles and the 5 year Transformation to 2020 does not look promising at all, market dynamics are creating havoc for Bombardier, but all of that had to have been anticipated when they decided to enter the BIG league and take on Airbus and Boeing, maybe not such a great idea after all ?

LOTS OF ARTICLES IN AVIATION DOCTOR ON BOMBARDIER, TAKE A LOOK. Bombardier (TSX:BBD.B) has released its 1st Half 2016 financials and its time to analyze what is going on at Bombardier so far this year in regard to its struggling Commercial and Business aircraft business. The first 6 months of this year, has seen Bombardier’s … Continue reading

SUMMARY: The 1st Half 2016 numbers are out for Air Canada and Westjet Airlines, the “duopoly” that controls +85% of the Canadian market, where Canadians still have NO domestic or transborder access to a low cost airline. A brief analysis of the financial performance of the 2 Canadian airlines this year with a introduction to airline economics on how a few key numbers drive operating profit. Seems Air Canada does not make an operating profit from passenger services alone, and why its LCC (low cost carrier) rouge has not really cut costs, with the vast majority of savings being higher density seating, and like other Major airline attempts at an in-house LCC in North America like TED (United), Song (Delta #2), Lite (Continental), Express (Delta #1) the cost cutting has NOT gone deep enough, and hence why ALL the North American in-house LCC “experiments” ultimately failed. Lastly, Air Canada’s decision to buy 45 x CS300’s was a politically coerced deal with legal and legislative changes promised by Quebec and Ottawa, and the recent Air Canada threat to “walk away” from the deal if promised legislation was not forthcoming soon, said it all, Air Canada’s EVP Kevin Howlett said it best, “there are alternatives to the CSeries, there are other manufacturers that make comparable airplanes”, meaning we can take it or leave don’t matter as they do have 61 x B737Max firm orders (33 x Max8’s and 28 x Max9’s) to replace its older A319/320’s and E190’s in due course.

The 1st half 2016 numbers are in for Air Canada and WestJet Airlines, and it’s worth looking at how the 2 airlines that control 85% of the Canadian domestic market, which also has NO low cost airline as of yet (the only OECS) whose citizens have no access to a domestic or transborder LCC (low … Continue reading