Bombardier Considers Further CRJ Production Rate Cuts

 - April 1, 2010, 10:26 AM

Bombardier Aerospace’s sales force will no doubt feel considerable pressure to boost CRJ transactions over the next month to month and a half, as the company again considers cutting production of its regional jet line in Mirabel, Canada, potentially leading to more layoffs. During the company’s fiscal year-end conference call today, Bombardier Aerospace president and COO Guy Hachey expressed particular concern about the “risks” associated with the company’s line of CRJ regional jets, most notably over the early part of this year.

“Fortunately, we did take in an order late last year [22 CRJ700s from American Airlines], but it is not enough,” Hachey said. “So we do have to look [at] the end of this year to see whether we can top off our skyline. Otherwise, we might have to reconsider the production rate for Mirabel.

“But over the next month and a half we’ll have to make a decision that depends on the campaigns that we’re able to win,” he added. “There might be a reduction in personnel, but we’re going to try to avoid that if we can.”

As of January 31, the backlog for CRJs stood at 41 CRJ700s, 18 CRJ900s and 49 CRJ1000s–barely enough airplanes to keep the line busy for 22 months at the current production rate.

Last year the company delivered 121 commercial aircraft, or 10 percent more than the previous year, and 25 percent fewer business airplanes over the same period, Bombardier said today. On the commercial side, it booked gross orders for 104 airplanes while accepting cancellations for 16. It also managed to increase its market share from 37 percent to 44 percent, said Hachey. This year, he added, the company expects to sell 20 percent fewer aircraft than it did last year, although Hachey predicted improving conditions in the second half.