Singapore Air Show

Chinese CRJ900 Order Revealed

 - February 14, 2012, 6:00 AM

Canada’s Bombardier identified China Express Airlines as a customer for its CRJ900 regional jet last week during Canadian Prime Minister Stephen Harper’s visit to Beijing for the Canada China Business Forum. The conditional order for six dual-class-configured CRJ900s plus options on another five, signed late last year, will give Bombardier its first sale of a new commercial airplane in China in “eight or nine years.”

Based on list prices, a firm order for the six CRJ900s would raise $264 million for Bombardier. Should the airline convert all five options to firm orders, the value of the contract would increase to $491 million.

“There’s been a lot of discussion about the need for new airplanes in [China’s] provinces,” Bombardier Commercial Aircraft vice president of sales for China and North Asia Andy Solem told AIN here on Monday. “There are more wealthy entrepreneurs outside Beijing and Shanghai.”

In China’s western provinces, particularly, as well as the central and northern parts of the country, the rate of annual traffic growth has reached into the “mid- to high teens,” creating ideal conditions for start-up enterprises to built fleets with jets in the size range Bombardier’s CRJ900 and 100-seat CRJ1000 occupy. The first privately owned regional airline in the People’s Republic, China Express now operates a fleet of five CRJ200s.

“Our 50-seat Bombardier CRJ200 regional jets have served us very well since we started operations in 2006,” said China Express chairman Hu Xiaojun. “We are confident that the CRJ900 NextGen aircraft, which offers excellent economics, will support the growing capacity demand on our larger routes.”

The disclosure–one of several announcements made in Beijing by Harper and Bombardier president and CEO Pierre Beaudoin–accompanied the signing of an MOU between Bombardier and China’s Avic International Leasing covering expanded cooperation in the area of financing of commercial aircraft sales in China and around the world. Avic Leasing, a subsidiary of Aviation Industry Corp. of China (Avic), is a lease financing company with what Bombardier called “substantial assets and a rapidly growing aircraft fleet.”

“This puts into place a lot of what we need to finance aircraft in China and elsewhere,” said Solem, who, while hesitant to identify specific deals, told AIN he expected his team’s efforts in the country to yield more business within the next year.

“Bombardier’s portfolio of commercial aircraft is well positioned to meet China’s rapidly growing air transport infrastructure, and Avic Leasing will use this MOU to work with airlines and develop solutions to their varied business requirements,” said Avic Leasing president Zhao Hong Wei.

“This MOU provides Avic Leasing and Bombardier with increased opportunities to grow their businesses by providing airlines with optimized aircraft and financing solutions in China and elsewhere,” said Mairead Lavery, Bombardier Aerospace vice president of strategy, business development and structured finance.

More than 80 Bombardier-produced aircraft, including CRJ Series and Q Series turboprops, as well as Learjet, Challenger and Global business jets, now operate in China.

Bombardier forecasts that over the next 20 years China will become the world’s second largest market for new aircraft deliveries, following closely behind the U.S. Bombardier forecasts a demand for almost 2,400 commercial aircraft in the 60- to 149-seat segment in China during that period (see page 36).