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CRJ-200

This tag is associated with 6 posts

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

ABSTRACT: Chorus Aviation, the biggest Air Canada Express partner with 122 aircraft, is buying DHC-8 / CRJ-200 ACMI operations specialist Voyageur Airways for $C 80 million on the heels of an amended CPA (capacity purchase agreement) with Air Canada (AC) that now extends into 2025, and one that requires Chorus to lower its costs, one way to do that is to set up a separate low cost unit (Voyageur Airways) to operate the older DHC-8-100/300’s at a lower cost base , and another unit will continue to operate the newer and bigger Q400’s, CRJ-705’s and the CRJ-200’s, it is a strategic move to lower labor costs (at $95,442 per employee, 9% higher than at AC) and to stop other regional airlines like Sky Regional and Air Georgian from winning new AC CPA business in the future, Chorus Aviation is paying a rather high 4.7 times EBITDA to have its ‘low cost subsidiary’, the old and out of production DHC-8’s (average 26 years old) have become a burden on Chorus which generates 99.2% of its business from AC, its previous attempts to diversity have all failed, a regional LCC is a fantasy, too little room for extra seats or extra utilization to drive CASM’s down, Chorus Aviation’s 2014 Net Income margin of 3.9% is very low and cash flow was negative $C 45 million, AC needs low cost regional partners more than ever now and it just gave Chorus a 10 year life line to shape up.

Canada’s Chorus Aviation Inc.  (TSX: CHR.B, CHR.A) is to buy all of the issued shares of 519222 Ontario Ltd. A holding company that owns North Bay, Ontario based Voyageur Airways and its affiliated companies for around $C 80.0 million to be its ‘low cost’ DHC-8-100/300 operator, a mini version of Rouge, which is Air Canada’s … Continue reading

ABSTRACT: Bombardier takes another credibility hit, stock drops 25% in one day as investor confidence is shaken and they are selling, another senior executive departs, the Learjet 85 is “paused” with a $US 1.4 billion write down, certifying 4 new jets at once costing $US 6.9 billion was “nuts”, the Q400 and CRJ’s programs are near their end, another 1,000 employees are to be laid off on top of 2,000 last year, corporate credit rating cut, talk of a Q400 and CRJ assembly line in China, only 243 firm orders for the CSeries after 78 months of effort, and probably 100+ will NOT take delivery, Alenia a major CSeries subcontractor sues for $US 121 million, CSeries EIS not till 2016, low fuel prices diminish the fuel efficiency argument for CSeries, while it’s launch customer is a secret ? sell Commercial Aircraft Division to China’s COMAC and create Combardier ? capital markets worried about liquidity and management, Business Aircraft Division now discounting some aircraft, Learjet cannot survive on only 33 Learjet 70/75 sales (+/- $US 335 million) a year, is it doomed ? sell it off ? with a cashflow of only $US 800 million in 2014 will Aerospace have the cash to complete certification and produce the $US 1 billion Global 7000/8000 business jets and the $US 4.5 billion CSeries ? time for an outsider as CEO – again ?

Bombardier, the world’s only plane and train manufacturer continues to disappoint shareholders, employees and customers, and on Wednesday, January 15th, we saw the wall crash down, when Bombardier stock (TSX:BBD.B) crashed downwards by 25.85% in one day ($US 1.8 billion in market capitalization) on volume of 57 million shares, to $CAD 3.07 from $CAD 4.14, ouch … Continue reading

The US regional airline industry is changing, only 3 BIG Majors left who use regional airlines, and now at least 584 small 50 seat RJ’s are on their way out to be replaced by up to 346 larger 76 seat RJ’s coming in (1.7 : 1.0 ratio) and that means the total US regional airline fleet is heading for a 14% decline of around 238 RJ’s, and can all of the 8 US regional “airlines” survive the changes ? and what is going to happen to all those 50 seat RJ’s ?

It is time to take a good and serious look at the US regional airlines and the “small” 37 to 50 seat regional jet market (Bombardier’s CRJ line and Embraer’s ERJ line), globally numbers 1,445 active aircraft, of which 1,054 (73% of global fleet) are operated by 8 US regional airlines for 4 mainline US … Continue reading

Air Canada’s Cost Transformation and Revenue Improvement strategy is tied to its new Fleet Renewal Plan, while its Lesiure markets will be enhanced by its new low cost subsidiary ROUGE, and following the example of US major airlines it is diversifying its regional Air Canada Express partners to drive costs down by making them compete for the business

For 2013, Air Canada had an operating profit of $CDN 619 million on revenues of $CDN 12.38 billion for a 5% operating margin and a net income of $340m for a 2.74% net margin, nothing spectacular but an vast improvement from where the airline was just a few years ago. By comparison, WestJet Airlines had … Continue reading

Is the 50 seat Regional Jet Really so Bad with No Future ?

The demise of the 50 seat Regional Jet market is accelerating at a rapid pace as once again scope clause changes ratified by the pilots unions at Delta Airlines and United Airlines clears the way for more 70 to 76 seat jets to be operated by the regional affiliates. Once again a market is changing … Continue reading