Bombardier “Fully Committed” to Russian Q400 Production

 - March 25, 2014, 11:51 AM
Yakutia Airlines operates three Bombardier Q400s from its base at Yakutsk Airport in northeast Russia. (Image: Bombardier)

Bombardier appeared to backtrack on comments in the Russian press by CEO Pierre Beaudoin indicating that the country’s annexation of Crimea could threaten the Canadian company’s planned joint venture with Russian conglomerate Rostec. On Monday a Bombardier Aerospace spokesman told AIN that the Canadian company remains “fully committed” to plans for a Q400 turboprop factory in a special economic zone in the Ulyanovsk region, and that the comments by Beaudoin didn’t refer specifically to the agreement with Rostec.

According to Russian daily newspaper Kommersant, Beaudoin warned of a postponement of the deal and his company’s willingness to abide by any sanctions imposed on Russia. Bombardier and Rostec had hoped to sign a definitive agreement by the end of this year.

The MOU, signed during last August’s Moscow Air Show (MAKS), accompanies a series of preliminary agreements including an LOI for the sale of 50 Q400s to Ilyushin Finance Company (IFC) and a so-called market development agreement with Rostec and its leasing subsidiary, Avia Capital Services, to place another 50 Q400s in the region. Bombardier estimates the potential value of the Q400 orders to amount to $3.39 billion at list prices.

In a statement, Bombardier called the establishment of the Q400 assembly line in Russia a “key” commercial requirement and a fundamental component of the series of agreements. Bombardier stressed that the assembly line would produce aircraft for Russian customers and that its assembly line in Toronto would remain the primary source for supplying the global market.

More than 120 Bombardier commercial aircraft operate in Russia and the Commonwealth of Independent States (CIS) and Bombardier forecasts a market demand of approximately 400 aircraft in the 20- to 99-seat market in the region over the next 20 years. Bombardier sees particularly strong potential for the Q400, which in June 2012 received type approval from the Interstate Aviation Committee (IAC)—commonly known by its Russian acronym, MAK—and subsequently entered service with Yakutia Airlines from that airline’s base in northeast Russia.