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Aviation Doctor - Helping aviation companies to transform the present into a more profitable tomorrow

I am a Canadian and EU national with an MBA and 33+ years experience in aviation business development with 20 years overseas and work in 25+ countries. A former investment/merchant banker (mergers and acquisitions to corporate turnarounds). airline and OEM senior executive and past owner of 6 successful aviation companies in 3 countries (executive jet charter/management companies, aircraft sales, aircraft broker, airline/aerospace consulting to aircraft insurance). I have a very diverse aviation background with 75+ aviation companies (45+ airlines of all sizes, OEM's, airports, lessors, MRO to service providers) as consultant, executive management, business analyst and business development adviser. Excellent success track record in International Business Development. Most work with airlines is with new start-ups and restructuring of troubled carriers. I sold new business jets, turboprops and helicopters for Cessna, Raytheon, Gulfstream to Eurocopter as an ASR as well as undertaking sales and marketing of commercial aircraft for Boeing, de Havilland, Dornier, Saab and Beechcraft. Brokered everything from LET-410's to B747's and from piston PA31 to G550 business jets. I look beyond the headlines of the aviation news and analyze what the meaning and consequences of the new information really means. There is a story behind each headline that few go beyond. Picked the name Aviation Doctor, as much of my work has been with troubled companies or those that want and need to grow profitably. I fix problems be in the business, and help with restructuring for a better tomorrow. You can reach me with comments or suggestions at: Tomas.Aviation@gmail.com and I comment a lot on Google+, my Facebook and LinkedIN.
Aviation Doctor - Helping aviation companies to transform the present into a more profitable tomorrow has written 128 posts for AVIATION DOCTOR: Critical Insights and Analysis, Beyond the Headlines

UPDATE: OMG ! Bombardier Inc. released its 1st Half 2017 Results, not good as expected. Total revenue $7.668B (down 6.7% on 1H/2016). BCA (Bombardier Commercial Aircraft), just 35 deliveries down from 47 in 1H/2016 (down 25.5%) and revenue down 14.4% on 1H/2016 with average discounting of 31% off list prices. Meanwhile, Q400 down to 31 orders in backlog (14 months of production), production down 21% (just 2.16 per month) on 2016, 13 deliveries and 13 orders, book to bill 1.0. CRJ line down to 47 orders in backlog (14 questionable CRJ-1000’s), production down 35% (just 2.5 per month) on 2016, 15 deliveries and just 10 new orders, so book to bill just 0.67. CSeries, NO new order in 2017, only 2 x CS300’s ordered in the past 15 months, yes an absolute sales & marketing ‘disaster’ from the “dream team”, but 7 were delivered (1.16 per month) yay ! whopee ! Only 65 business jet deliveries (down from 73 in 1H/2016) while revenue down 13.8% on 1H/2016. Now, all eyes are on US Commerce Department decision September 25th in regard to imposing countervailing duties on the CSeries of 79% for basically ‘illegal state aid’ to Bombardier by Ottawa and Quebec, and another 79% duty for anti-dumping, basically selling the CSeries a whole lot cheaper in the USA, to Delta Air Lines than back at home to say Porter Airlines, a unfavorable ruling could and will shut the struggling CSeries program out of the all important US market, as if the program needed more problems ?

READ: more on Bombardier or other topics by clicking categories on the right. Well today Bombardier Inc. released its 1st half 2017 results, and and its not good, as revenue is down 6.7% to $7.668B on 2016, this company is NOT going to be a $25.0B a year company in 2020 as planned in its … Continue reading

SUMMARY: While India’s aerospace industry is growing, most of it is on the military side while commercial aviation is far behind, yet HAL (Hindustan Aircraft Ltd) started with license production of the Hawker Siddley 748 turboprop airliner almost 40 years ago (89 built) and then in the mid-1980’s continued with the Dornier 228 (till now +125 built), and that is is ? Oh, lets not forget the never ending 29 year development of the NAL Saras, a 14 passenger pusher turboprop resurrected earlier this year again, for what ? its too small for India’s needs. The Indians know they need bigger aircraft, have the “plans” for the 80-90 seat Regional Transport Aircraft (RTA) turboprop and the 70-100 seat Indian Regional Jet (IRJ), but as of now its just talk and nice computer generated pictures. Of the top 7 major aerospace manufacturing nations, India is ranked 7th, yet was ahead of the Chinese 30 years ago, but it has not moved forward, while the Chinese now have the ARJ-21, C919 and soon MA-700 turboprop, all India has is the little 19 passenger Dornier 228, and that is it. What is India waiting for ? it has a huge market for aircraft between 19 to 100+ passenger turboprops and jets, it could have been a major competitor in that segment to Brazil, Canada and China, but its out of the game, too late now because too many new players in the market, Japan (MRJ-75/90), Turkey (TR/TRJ-628), Russians (SSJ100, MC-21) and Indonesia (N219), and other nations to come ?

 India’s commercial aircraft industry struggles to get “off the ground”, yet it has had years of experience and some success, but today it is sadly out of the game. Hindustan Aeronautics Ltd. (HAL) first licence production was in the early 1980’s to 1988 the 44 passenger British HS-748 turboprop, of which 380 were built, and … Continue reading

SUMMARY: Canada’s Viking Air is shutting down its expensive $7.5M Series 400 Twin Otter production for 90 days and laying off 212 workers (46% of work force) as deliveries have exceeded sales for sometime and one cannot live off one’s backlogs for too long before you have “white tails”, which apparently there are 6 right now in Calgary. The 19 seat utility market is tough, roughly 33 aircraft deliveries per year by just 4 OEM’s, and surely no one really makes money in the market ? While Viking has delivered 120 in the past 7 years, it is far short of the 2006 forecast of 440 (at a price of $3.195M) over 10 years (off by 300%). Could the much higher price (+134% on 2006 price) have something to do with the lower demand ? off course like with all the other OEM’s, the high price ($279,000 to $447,000 per passenger seat) has killed the market (B737-800/A320 at around $275,000 per passenger seat), but with very low production rates what can you do ? Nothing ! Now, Viking is looking at the out of production turbine powered $37M per copy CL-415 water bomber as a possible new production program. The turbine CL-415 had just 90 deliveries in 22 years of production (4.1 per year) while the radial engine CL-215 had 125 deliveries over 21 years (6.0 per year), so no BIG market here in water bombers, maybe 4 to 5 per year ? but I think a 30 seat regional amphibian can make a difference, the CL-215C ‘Transport’ (2 delivered to Venezuela long ago) is a 30 to 36 passenger certified version and the market is out there all over the world, more than for a firefighter, and surely another 4 to 5 CL-415C ‘Transport’ per year, can change the business case for re-starting the production line for the CL-415 ? 10 aircraft and $+375M in annual revenue sounds good (that is equivalent to 50 x Series 400’s).

READ” Blog on 2016 Turboprop Market (click General Aviation) for more info on the 19 seat market in the March 9, 2017 issue   Viking Air has announced on May 31, 2017 that it is shutting down production of its $7.5 million Twin Otter Series 400 for 90 days and will lay off 212 starting … Continue reading

SUMMARY: The Caribbean is a “graveyard” for airlines over 40 in the past 30 years, with 6 government owned airlines still flying and still burning taxpayers money, destined to never make money because they never change, till now. Cayman Airways, owned by the British Overseas Territory of the Cayman Islands has been changing quietly for years, reducing its debt, modernizing its fleet with 4 x B737-8 (Max8’s), but still dependent on $20+M per year from the government. A new modern fleet will help reduce operating costs but lease rates will be 6 times more than the B737-300’s, and new routes like the latest to Roatan, Hondurans are a good sign of expansion. It is at least a change, the other 5 government owned airlines are ‘business as usual’, politicians sticking their noses into everything they don’t understand, no new initiatives, no new strategy, no new leadership, just sitting around their desks “doing the same things over and over again expecting different results” (Einstein’s definition of insanity) and it applies so well to these 5 perpetual money losers. Only radical change will bring about a brighter future for Government owned Caribbean airlines, its time for surgery to revive them or its time for euthanasia, and cut off their life support (aka taxpayers money) ? one or the other, but things cannot keep going on usual, at some point creditors will have had enough, and then its THE END.

I have written about the Caribbean airline fiasco for years, you can read previous Blog articles on LIAT, Surinam Airways, InselAir, etc.by clicking on State Owned Airlines (under Categories) For many years I have written about the plight of Caribbean airlines, and the infamous region I call a “graveyard” for airlines. Yes, the list of … Continue reading

SUMMARY: Is it too Early to Bury the A380 ? Then a look at the costly $25.0B, A380-800 program in more detail which has just 317 orders and 210 deliveries for the $436.9M List Price airliner now operated by 13 airlines. As we approach 10 years in service with Singapore Airlines we will see the first used A380’s to come to the used market (for airline and possibly VVIP/Head of State use). Does the big 4 engine airliner have a future ? a niche ? as it is the lowest cost per unit (CASK) airliner in the world at Emirates, where some are configured with 615 seats, and its why Malaysian Airlines is putting in 700 seats on its A380’s for Hajj and other charters, wile ANA will have 600+ seats in its 3 x A380s for its high demand leisure flights from Japan to Hawaii, replacing 2 x B767-300’s flights with one A380 flight, a sign of some new potential for the “Queen” of the skies ? Lets hope so.

https://www.aerotime.aero/en/civil/18805-is-it-too-early-to-bury-the-a380 ————————————————————————————————————————————————————————————— With permission from Aerotime Is it too early to bury the A380? Published on: May, 19, 2017 Source and image:Oleg Volkov Airbus A380 is big, beautiful, and notoriously problematic when it comes to airport availability and – most importantly – profitability. For some, like Emirates, it is still a signature aircraft that is … Continue reading

SUMMARY: The General Aviation turboprop deliveries are out for 1st Quarter, 2017 and deliveries are down to 99 aircraft and $273.M in revenue, from 109 deliveries in 1Q/2016 (-9.1%). The decline is due to the large drop in the Twin Turboprop Pressurized Segment, which had only 12 deliveries of King Airs (and NO Piaggio Avanti Evo) versus 27 deliveries (inc. 1 x Piaggio Avanti Evo) in 2016, a drop of 55%, what is happening to the King Air demand or the “walking dead” Piaggio Avanti EVO ? The Agricultural Turboprop Segment did the best with 46 deliveries up from 38 in 2016 (+27.7%) with revenues of $54.1M. The Single Engine Pressurized Segment was stagnant at 23 deliveries as in 2016, with Pilatus delivering 4 less (-25%) PC-12NG’s than in 2016, and total revenue of $98.7M (+26% more than the twin market). The Single Engine Utility market was down to 18 deliveries and had revenue of $42.1M on the back of 4 (-33%) fewer Caravan deliveries, but Quest’s Kodiak was up to 9 deliveries (+80%) over 2016 delivery of 4 aircraft. The big “loser” this past Quarter is Textron Aviation with 12 King Air deliveries down from 26 and then the Caravan with deliveries down to 8 from 12 last year, so what’s up at Textron ? as 16 less turboprops were delivered versus 2016. The “winners” are Quest Aircraft’s Kodiak with 9 deliveries up from 5 last year, and the Air Tractor with 36 deliveries up from 28, a good start for most, but Textron ?

  READ MORE ON THE TURBOPROP MARKET, JUST CLICK ON GENERAL AVIATION   The First Quarter, 2017 General Aviation turboprop deliveries are out from GAMA, and total aircraft unit deliveries are down (-9.1%) to 99 from 109 in 1st Quarter, 2016 and total revenue was $273.2M ($2.75M per average aircraft delivered). ————————————————————————————————————————————————————————————— The Agricultural Aircraft … Continue reading

SUMMARY: Textron Aviation culls its smallest Citation, the $3.35M CE-510 Mustang after 11 years and 472 deliveries. In 2016, Gulfstream dropped its smallest product, the $15.7M G150 (an improved G100, originally the IAI Astra SPx, never a big seller with just +120 deliveries in total) and the $43.1M Gulfstream G450 (ex-GIV) which will be replaced by the new $44.6M G500. The Very Light jet segment has struggled since 2009 when deliveries hit 236 to a low of just 62 in 2013 and 89 last year by 4 OEM’s. With The Mustang gone, the entry level jet for Textron is now the $4.5M CE-525 M2 to take on the $4.16M Embraer Phenom 100E and the $5.0M HondaJet HA-420, which is now in full production mode after years of certification delays, and a surprising 15 deliveries in 1st Quarter 2017, where deliveries by the top 3 OEM’s of Very Light jets was up to 28 from last years 9, a 211% increase on 1Q/2016, and a sign of new life for a struggling segment ?

The latest news from Textron Aviation, that the company is terminating the smallest member of the Citation line, the $3.35M CE-510 Mustang (PHOTO below), which has had 472 deliveries by the end of 2016, since starting the line in 2006. The Very Light jet market ($3.0M to $5.5M aircraft) has been in decline from 2009 … Continue reading

UPDATE: Bombardier Inc. ex-President & CEO, and as of today also ex-Executive Chairman, Pierre Beaudoin is out at least ! and so are 1st Quarter, 2017 financials. In the first 3 months of 2017, Bombardier’s revenue is down to $3.6B (-7.7% on 1Q/2016) continues its revenue slide (down $3.77B or -18.7% since 2014). Aircraft deliveries for 1Q/17 are down to just 44 aircraft (15 Commercial and 29 Business) , Q400 deliveries were 6 with just 26 orders in backlog (13 months), CRJ deliveries were 8 with just 54 orders in backlog (20 months), and only 1 CS300 delivered. Bombardier delivered 29 business jets, more skewed to light jets as the top end market is struggling these days, not good news for the new Global G7000. Meanwhile, only 2 x CS300’s orders in the past 11 months ? the program has a serious problem selling the aircraft, and two, selling above cost at some point is important, no ? Now, Boeing wants US Commerce Dept. to place a $13.4M “price dumping” tariff on the CSeries deal with Delta Air Lines and ban the aircraft from further US sales, meanwhile ATR and Embraer are complaining to the WTO of Canadian “illegal state aid” to Bombardier, criminal bribery investigation under way in Sweden and yet the top 5 executives wanted a 50% increase for an “Exceptional 2016” seriously ? One wonders what “planet” these executives live on ? and where is this “magical” 7,000 deliveries in 20 years in the 100 to 150 passenger market ? This CSeries program is still with just 320 orders (no 40 for Republic, just PR deferral till the end of time) after 9 years ? maybe they got the market positioning all wrong ? What happened to the “game changer” ? and the “dream team” ? that was suppose to sell lots of CSeries ? Those Top 5 executives need to go, 1 down 4 to go ? Lastly, Porter Airlines (Canada) placed a conditional order for 12 x CS100’s and 18 options in April, 2013, show the price offered to Porter and we will all know if they are “price dumping” in the US market or not, easy no ? Behind all the denials they know they are “price dumping” its sadly the only way they know how to sell the CSeries, yup all 340 orders below cost !

READ more on Bombardier on this Blog, just click Bombardier under Categories on the right side of menu.   The 1st Quarter results are out for Bombardier, but the most important news is that Executive Chairman, Pierre Beaudoin is stepping down after numerous problems and Revenue declines. The man I refer to as the “Destroyer” … Continue reading

SUMMARY: A small airline in Thunder Bay, Ontario, North Star Air Ltd. has been bought for $C 31M ($US 23M) by Winnipeg based North West Company (NWC), a large Canadian grocery and retail company with +218 stores, many in remote and isolated communities across Canada’s North. The driver of this deal was to control its distribution by having its own cargo airline, and not being dependent on what is basically a air cargo monopoly by Calm Air in the Manitoba, Nunavut and Kivalliq regions, where NWC has many stores, and where the First Nations communities are totally dependent on aircraft for all their local needs for most of the year. The acquisition raises the problem of a lack of competition in many parts of the North, where communities and suppliers have all but one choice of airline in and out of many communities, which in many cases allows for high margin “monopoly” pricing. Canada has no Essential Air Service (EAS) like the USA, which subsidizes scheduled air services to 150 markets of which 44 are in remote parts of Alaska with single engine turboprops like the CE-208B to SF340’s and CRJ-200’s at a cost of $250M a year (President Trump looking to cut that). Canadian passengers and suppliers in the North have no choice but to pay the very high fares and freight rates demanded by air operators. Time for a new fresh look at affordable air access in the North ? if we are to develop the North as Ottawa says, then we cannot burden and punish the people there with high fares and freight rates, that make life their very expensive as everything in most communities goes by air, from groceries, lumber to even fuel for electric generators.

It has been pretty quite on the Canadian airline mergers and acquisition front since the late June, 2016 acquisition of Transwest Airlines (Prince Albert, Saskatchewan) by local rival West Wind Aviation (Saskatoon, Saskatchewan). That deal created another Provincial regional airline monopoly, just as EIC (Exchange Income Corporation) has in neighboring Manitoba, where it now owns … Continue reading

SUMMARY: The Chinese COMAC C919 airliner made its first flight today (May 5, 2017), and hopefully it will not be long before it is delivered to its first customer, China Eastern. The Comac ARJ-21-700 regional jet (evolved from the locally built MD-82’s and MD-90-30’s programs) took an incredibly long 2,769 days (93.3 months or 7.6 years) from its first flight to delivery to its first customer. This C919, is NO ARJ-21, this is an aircraft China can be proud of and one that can and will compete with Airbus, Boeing, Irkut and Bombardier when it gets its EASA Type Certificate which will take time, as the shadow certification of the ARJ-21 with the FAA did not materialize. Yes, there will be many issues with very poor sales & marketing, product support and after sales service, something Comac has no experience with and AVIC is horrible at. The ARJ-21 has no FAA certification and most likely never will, and will be relegated to flying for Chinese airlines and the very few “dubious” nations that do not require EASA or FAA certification for local registration and operations. The C919 has 99 orders, 227 options and 566 “commitments” so well over its stated break-even of 400 units. A proud day indeed, given the fiasco with the ARJ-21, now Comac will work with EASA to shadow certify the C919, but that will take a few years for sure, so no immediate concerns for the other 4 competing OEM’s. Lastly, this C919 is not the first Chinese indigenous jet airliner, back in 1970 the Chinese then under Chairman Mao Zedung, developed the Shanghai Y-10, a close similarity to the Boeing B720/B707, but it started way before President Richard Nixon’s famous trip to China in 1972 with Air Force One, a C-137 Stratoliner, a modified long range Boeing B707, referred to as SAM26000 (special air mission), in service from 1962 to 1999.

With the Comac C919 making its first flight, China finally has a commercial aircraft it can be proud off, and this aircraft will be able to compete with the Airbus A320neo, Bombardier’s CS300, Irkut MC-21, Boeing B737-7 and, B737-8 in time as it will require years to get its EASA certification, but Chinese airlines who … Continue reading

UPDATE: Bombardier, the Canadian Government and 49.5% owner of the CSeries program (through CSALP) the Quebec Government are together discounting Boeing’s claim that Bombardier is “price dumping” the struggling CSeries program on the US market (Delta Air Lines order for 75 x CS100’s in April, 2016). In short, “price dumping” means much lower prices on the export market than in a home market. Most likely its true that Bombardier is offering +60% discounts on the CSeries, which means selling below cost and at a loss. Having just 320 orders after 9 years, the company is desperate for orders, and purchase price is the #1 determinant these days by all airlines. Now, Boeing is seeking an order against the sale of the CSeries aircraft in the US market. That would be a severe blow to Bombardier and the CSeries as no commercial aircraft has gone on to be a success, without major sales in the US market (e.g. Viscounts, BAC 1-11, VC-10, Concorde, Saab 2000, Fokker F50, Fokker F-70, Dornier 328/328Jet, etc.), though the US market is not as dominant as it once was, it is still crucial for every commercial aircraft OEM. This is the stuff, President Trump loves, big announcements that he is saving the US workers jobs against foreign companies that don’t play by the rules, for Bombardier the timing could not be any worst. But they wanted “state aid” and with it comes the perception of “illegal state aid”, and Boeing is not the only one to complain against Bombardier, as Airbus and ATR have made moves to go to the WTO (World trade Organization) to investigate Canadian state aid to Bombardier. Now, most Canadians know that “state aid” or “corporate welfare” is going to the company from our pockets, this has been on going for 50+ years and sadly its all a “state secret” even though its public money going to a private company. Canadians have no idea how much taxpayers money was given or returned by Bombardier, for it is THE symbol of Quebec’s industrial capabilities, and always treated “special” here in Canada by most governments in power since the 1970’s. It was then that Quebec started to contemplate breaking away from Canada and becoming its own independent state, and that is why it has been given so much money and cheap deals on privatization of Canadair $120M in 1986 and de Havilland $100M in 1992 from which the whole Challenger, CRJ, Global,DHC-8 and Q400 aircraft products all came from.

The Canadian Government off course is standing by Bombardier on this, but as I have been on this issues since the Delta Air lines deal, I know through contacts and Boeing knows even better what the price to Delta Air Lines (DAL) was. Now comes a lot of trouble, which was expected as the CSeries … Continue reading

SUMMARY: Boeing has complained to the Trump Administration and the International Trade Commission about Bombardier’s “price dumping” in the 2016 Delta Air Lines (DAL) deal for 75 x CS100’s. Which according to Boeing was done at a price of $19.6M per unit (72% off list price), on an aircraft Boeing says costs $33.2M to produce, a loss of $13.6M per unit (yes, a -69% profit margin) and a total loss of $1.02B on the Delta deal. That is even lower than my highly criticized numbers from “industry experts” for the past 12 months , using a price of $22M (69% off list price), CS100 production cost of $29M and a loss of $7M per unit, a $525M total loss, now the loss on the DAL deal using Boeing numbers is 94% ($495M) higher than what I calculated a year ago. So much for Bombardier’s BS “onerous contract provision” of $492 in 2016 that everyone pointed to as the “loss”. Now Bombardier’s desperation for CSeries sales is out in the open. It “dumped” prices way below cost, in fact all 320 CSeries orders (in 9 years of dismal sales/marketing) are priced below cost and surely Air Canada’s 2016 deal (45 x CS300’s) was at a huge discount of +/-72% as well, and the total loss could be as high $612M on top of the DAL deal. So Bombardier sold 120 aircraft in 2016 on 2 BIG deals, that may end up being a loss of $1.63B and the greedy top 5 Executives at Bombardier wanted a 50% pay raise last month for a “Exceptional” 2016 ? BS, they should all be fired! As well, since last May’s deal with DAL, only ONE order for the CSeries has been booked, from Air Tanzania for just 2 x C300’s, yes 12 months and 3 big Air Shows (Farnborough, Dubai, Zhuhai) and just 2 aircraft orders and no one is worried ? seriously ? Meanwhile, Airbus has 5,056 orders for its new A320neo family and Boeing has 3,703 orders for its new B737Max family. Lots of talk about new sales at Bombardier (BA, Spirit, JetBlue, etc.), but since there are just 4 OEM’s, every airline will want to talk to each OEM when doing a deal to get the lowest cost. The problem is NOT the CSeries, its fantastic, but very low demand in the 100-150 passenger market, coupled to intense price competition by the duopoly makes life impossible for the CSeries. With all 320 CSeries sold below cost, why be in the business ? as the deliveries of these 320 aircraft will take Bombardier well into 2021, with a big loss every year of production, I see NO light at the end of the tunnel, other than an acquisition by COMAC (China) that needs Bombardier’s know how in support, training and sales/marketing ? and its the only commercial aircraft OEM that can be bought.

READ more on Bombardier, just click and see past Articles on the troubled OEM. https://www.linkedin.com/in/tomas-chlumecky-3200a021/ I have been saying for a long time that the move to make the CSeries a government owned program by spinning off the program into a new limited partnership (CSALP-CSeries Aircraft Limited Partnership), where the Province of Quebec has 49.5% … Continue reading

SUMMARY: Beautiful, high technology aircraft are great, but do NOT guarantee commercial success, in the end its about meeting customers’ needs rather than on selling a ‘product’, and here lies the problem with Bombardier’s CSeries sales. The company came out with its so-called “game changer” in July, 2008 (yes 9 years ago and yet only 320 orders today), with claims it is 20% more fuel efficient and has 15% lower cash operating costs than currently produced aircraft with a fantasy forecast that 7,000 aircraft over 20 years will be delivered in the 100 to 150 passenger segment ? and it all sounded like they had a “winner”. BUT with low fuel prices and interest rates and airlines up-gauging from smaller 100-150 passenger airliners, the CSeries ‘benefits’ have fallen on deaf ears with airline executives, unless a huge +65% discount is offered to make the deal (e.g. LH, DL, AC, etc.), yet the only CSeries deal done in the past 12 months since the hugely discounted 75 x CS100 deal with Delta Air Lines (Loss to Bombardier of $+/-525M), has been 2 x CS300’s to little known Air Tanzania ? Meanwhile Airbus has accumulated 5,056 orders for its A320neo line and Boeing’s Max line has 3,703 orders. Is there a lesson here for OEM’s ? Off course, “don’t count your chickens before they hatch”.

Check out previous Articles on Bombardier, Commercial Aircraft, Low Cost Airlines, General Aviation, Regional Airlines to Airline Management and Mergers and Acquisitions https://www.linkedin.com/in/tomas-chlumecky-3200a021/recent-activity/posts/   We forget that high tech fantastic aircraft do not add up to commercial success (PHOTOS BELOW: Concorde (Mach 2+ airliner), Canada’s Avro C-102 Jetliner (2nd jet airliner to fly after the … Continue reading

SUMMARY: Canada’s WestJet Airlines, is planning to start a new ultra low cost carrier (ULCC) later this year with 10 x B737-800’s. This will be the first time that a low cost carrier (LCC) that re-positioned itself into a hybrid airline, goes back and starts a ULCC and goes after a market segment they abandoned years before. This is so badly needed in Canada where the top two airlines have a duopoly and control 85% of the domestic capacity, and till today there is NO real low cost carrier (LCC) in Canada, the only major developing country in the world not to have one. In fact, NO US based low cost carrier competes in the Canadian market (yet), and its why +5 million Canadian passengers drive across the US border every year to fly from US airports to save on air travel, by using lower cost US airlines. A ridiculous passenger spillage that no one seems to care about, while the only low cost airline right now coming into Canada is Iceland’s fast growing WOW Air with very low priced deals to Iceland and Europe. The ultra low cost model is growing and even now the US big 3 airlines (DL, UA and AA) are experimenting with their new “Basic Economy” pricing, no amenities, everything ‘extra’ approach, good idea or a dilution of their brands ?

So WestJet Airlines, once Canada’s LCC is starting all over again with another LCC airline of its own ? is this to counter the growing competion from Air Canada’s “LCC” rouge, and the new Canadian planned start-ups like Canada Jetlines, Fly Too (Enerjet with Indigo partners) and NewLeaf now that foreign ownership of a Canadian … Continue reading

SUMMARY: Bombardier’s on going 5 Year Transformation Plan looks to $25 billion in Revenue by 2020 (+53% on 2016 Revenue of $16.33 billion which is down 18.8% or $3.8 billion since 2014), with $15 billion (60%) to come from Aerospace, Commercial Aircraft (BCA to $5 billion + 129% on 2016) and Business Aircraft (BBA to $9 billion +54% on 2016). I look at how realistic that is given the CSeries poor sales after 8+ years (320) and several old, tired and dying programs that need to be culled, from the Q400, Learjets to the 1970’s designed CL-600 Challenger and its evolutionary cousins the CRJ, G5000/6000 (BBA’s once “cash cow”) and new G7000 line. My take is that Bombardier will fall short by at least $6.5 billion on its Commercial and Business Aircraft goals, as realistically by 2020 all Bombardier will have to sell in Aerospace is its CSeries, the new Global 7000/8000 business jets and the Challenger 350. At the same time all of its products are going to face lot more competition from Airbus, Boeing, Comac (China), Irkut (Russia) and Embraer on the Commercial Aircraft side as the ‘duopoly’ turns into 5 competitors, with Bombardier the weak “5th Wheel”, while Business Aircraft (BBA) is facing new competing aircraft from Gulfstream (G500/600), Dassault (Falcon 5X/8X) and Textron (Longitude/Hemisphere). Bombardier is also facing a ‘perfect storm’ of tougher global market, economic and political forces that will challenge Bombardier’s on going struggle to become financially viable without taxpayers Government money. Empowered by ‘state aid’ the company is now arrogant enough to launch another new aircraft program, as Sweden is investigating serious bribery charges against the company and the top 5 Bombardier executives get almost 49% pay increase for what I do not know ? yet 14,500 employees are being laid off, and the “gong show” at Bombardier continues.

READ MORE ON BOMBARDIER on this Blog just go to ‘Categories’ and click on Bombardier https://www.linkedin.com/in/tomas-chlumecky-3200a021/recent-activity/posts/ ———————————————————————————————————————————————————————————– Bombardier Inc. released its 2016 Annual Report last month and while the company had Revenues of $US 16.339 billion in 2016 (down 18.7% on Revenue of $20.111 billion in 2014) and recorded a Net Loss of $981 million … Continue reading

UPDATE: The Czech Republic’s 10-14 seat twin engine turboprop utility, the Evektor EV-55 Outback has been put on hold. Ever since its first flight in June, 2011 the program never had the money to move forward to certification and production, and the $200 million Malaysian investment by former P.M. Dr. Mahatir bin Mohamad never materialized and was in short, a sad “joke’. This is what happens when you have a good performing and well positioned product, but you cannot sell it to investors, because you do not understand what investors want to see and hear. This turboprop General Aviation market is tough business and small companies struggle to compete even after certification and production (PAC 750XStol, Piaggio Aero P.160 Avanti) and then there are those that take years to get certified and still face an uncertain future (Epic 1000, Mahindra Aerospace GA-10, Dornier Seastar/Seawings, Caiga AG 3000, etc.), this program sadly cannot and may not get to the starting gate, and join other programs from the Czech Republic that made it to prototype stage but never into production (LET-610G, Ibis Ae-270, Wolfsburg 270, VUT-100 Super Cobra, Ayres LM-200 Loadmaster, Z-400 Rhino) and now the Czech General Aviation industry faces total collapse, barring production of small 2 seat light sport aircraft (LSA’s).

READ: BLOG Article of March 9, 2017 on the 2016 General Aviation turboprop market   Evektor’s Press Release – numerous media today: 16. 3. 2017 It is our obligation to inform you that Evektor has temporarily put the EV-55 project on hold until some uncertainties have been solved with our Malaysian investor. In any case, to secure … Continue reading

SUMMARY: The 2016 General Aviation turboprop deliveries and sales numbers are out from GAMA, and the turboprops were the only segment to record an increase in deliveries (+3.4%), as piston (-4.9%) and especially business jets (-7.9%) are down on 2015 numbers. With 576 turboprop aircraft delivered (and 675 engines, all PT6’s except 10 GE H80 engines) with a sales value of $US 2.057 billion (+8.6%), 2016 was a good year for 3 of the 4 segments (Agricultural, Single engine utility, Single engine pressurized) with Twin turboprop deliveries slightly down (-9.1%). In terms of units, the best segment was the Single engine pressurized with 179 deliveries led by Pilatus with 91 deliveries of its PC-12NG, but new competition is coming soon from Textron’s Denali and EPIC 1000. By sales, the best segment was the Twin Turboprop market, which is dominated by Textron’s King Air (C90/250/350) line with $793 million in sales. While not in GAMA figures, the 5 OEM’s still in the 19 passenger turboprop market, delivered +/- 35 aircraft worth $US 255 million. Lastly, the Agricultural aircraft market is still doing well, with 151 deliveries worth $198 million from crop spraying, fire fighting to actual counter insurgency (COIN) fighting, showing how versatile the turboprops really are today and why we see GE now challenging the P&W PT6 domination of the market for over 50 years.

READ: 2015 GA turboprop results, February 17, 2016 blog. https://www.linkedin.com/in/tomas-chlumecky-3200a021/recent-activity/ Another year has passed and time to do my annual turboprop review. The 2016 GAMA shipment and billing numbers were not good for the industry, with overall billings down from $US 24.1 billion in 2015 to $US 20.7 billion, down 14.1% while unit deliveries were … Continue reading

SUMMARY: Bombardier is looking into upgrading its CRJ line, which after +1,864 deliveries is now down to around +/-58 orders at best in backlog or 14 months of current production (April, 2018). The sad reality is that the CRJ is no longer very competitive against the current Embraer E175 and the new E175/190-E2’s will make the CRJ obsolete, in fact since 2003 it has been in decline and losing market share to Embraer for 14 years and the order backlog is now “critically” low. After having upgraded the CRJ cabins in 2016, now the focus is on possible new engine (unknown at this time), but that is an expensive upgrade versus the current GE CF34 engines, and adds weight, which for a long fuselage aircraft like the 119 foot long CRJ-900, with rear mounted engines is not good for C of G issues. With only 19 CRJ orders in 2016, Bombardier has been milking and living off its backlog, but is there any life for the CRJ really ? even after +/-30% discounts off list price, sales are not impressive anymore. The CRJ is a 1970’s Canadair CL-600 Challenger (the Type Certificate for all CRJ’s), stretched 4 times with a tight cabin width of just 8 feet and 5 inches (2.69 meters) that has been become a 50 then 70 then 85 and finally 104 passenger airliner, while Embraer designed and built the EJets from scratch, and that is now paying off got Embraer and blowing up in Bombardier’s face. At a time when the CSeries is still struggling for orders, Bombardier Aerospace needs all of its products to sell and sell, yet the Learjets, Challenger 650, Global G5000/6000, Q400 and CRJ are sadly in the final decline phase of their product life cycle as new competing products are coming online across all segments..

Follow up to the January 4, 2017 Blog “Lots of Talk about Bombardier’s turnaround”   Bombardier is now looking for solutions to keep its CRJ line open for a couple of years as the backlog now dwindles to 14 months at current production rate of 4.2 per month and current order book. Now paying for … Continue reading

Surinam Airways must ‘think Big’, with a Big vision for the future beyond just Suriname, too many small national carriers think ‘small’ and never achieve their full potential, sticking to old tried ways without much success, yet look at the success of COPA (Panama), Norway Air Shuttle (Norway), Ethiopian Airlines (Ethiopia), Ryanair (Ireland) to Singapore Airlines (Singapore), think Big, plan Big, act Big and do Big things and you become Big in time, step by step. But if you think small, plan small, act small you will always remain small and insignificant and most likely, not profitable.

Surinam Airways must ‘think big’, says aviation expert Published on January 23, 2017 by Caribbean News Now by Ray Chickrie Email To Friend    Print Version  By Ray Chickrie PARAMARIBO, Suriname — In his assessment of Surinam Airways (SLM) (3 x B737-300’s and 1 x A340-300), aviation expert Tomas Chlumecky has called on the airline to “get out … Continue reading

SUMMARY: Lots of talk about Bombardier’s Turnaround, 14,500 layoff announcements this year, or 21,450 in the past 3 years. The Global G7000 flew for the first time and Bombardier expects big things from it to boost Bombardier’s bottom line along with the struggling CSeries, which today still has only 320 orders (NO 40 x CS300’s for Republic Airways, just PR not wanting to reduce the meager order book) and still +/- 86 “questionable” orders (representing 26% of the current 320 orders). Lots of effort in reducing labor costs, yet no one is noticing that the top line (revenue) at Aerospace is a coming disaster, and unsustainable with an old product line (1970’s Learjets and Canadair CL-600/Challenger 650, plus the Global G5000/6000) that is facing new and better competition. The CRJ line has no more than 48 orders in backlog, only 18 orders this year (50% from Canada) good for 12 months of production (February, 2018) with no new orders. The Q400 is down to around 34 orders in backlog and only 25 orders this year (50% also from Canada), good for 14 months (March, 2018) with no new orders. The 2020 Turnaround Plan calls for Aerospace to generate $15 billion in revenue (60% of total revenue planned of $25 billion), with just 2 products ? The Plan requires $5 billion from Commercial aircraft, which by 2020 means only the CSeries (CS100/CS300) is left, and that will require at least 140 deliveries at the current highly competitive low prices to hit the “target”, really ? (2020 production is planned at 90-120 aircraft today). Meanwhile, Business jets are to generate $10 billion by 2020, and that will fall on the $75 million Global G7000 (NO Learjets, Challenger 650 and Global G5000/6000’s by 2020) and that means 133+ G7000 deliveries to hit their “target” ? seriously ? has anyone looked at single aisle ACJ and BBJ sales for the past 15 years ? (+/- 15 a year at best). Canada is providing “state aid” (aka taxpayers money) to Bombardier again ($2.5 billion in 2016 from Quebec), in fact of the $3.39 billion of cash on hand as of Sept 30, 2016, $2.5 billion (71% of cash on hand) came from the Government of Quebec, soon another $1.0 billion will most likely come from Ottawa (PM is from Quebec, and they always “help” Bombardier), and then Quebec and Ottawa will be 66.7% owners of the CSeries program (CSALP – CSeries Aircraft Limited Partnership, a separate company, spun off from Bombardier ??). How did we the Canadian taxpayers become “owners” again of a commercial aircraft program that NO commercial aircraft OEM wanted in 2015 when it was for sale for “a song” ? Especially after we the Canadian taxpayers “SOLD” Bombardier, our government owned Canadair in 1986 (for $120 million) and government owned de Havilland in 1992 (for $100 million) with the rights to the Challenger business jet, later stretched into the CRJ line, and the DHC-8 turboprop airliner later stretched into the DHC-8-Q400 line. Meanwhile, Embraer is going to the WTO again to complain about Bombardier’s “illegal state aid”, while Boeing may go to President-elect Donald Trump and get import tariffs applied on the CSeries and then ? Oh, it is going to be an interesting 2017 for sure, stay tuned to the never ending Bombardier/Quebec/Ottawa “gong show”, as they find new ways to screw Canadian taxpayers to keep Bombardier alive at any cost.

Bombardier has now delivered its first CS100 to Swiss and CS300 to airBaltic and talks confidently of a turnaround next year and a bright future in 2020 as per its 5 year Transformation Plan, that should see company become a $US 25 billion a year company by the end of 2020, with Aerospace to provide … Continue reading