After C-Series stall, what next for Bombardier?

Singapore Air Show » 2006
December 1, 2006, 8:17 AM

Bombardier Aerospace’s decision to suspend its long beleaguered C Series has naturally raised questions about what direction the company will take now that it has spent more than a year and $100 million on a still undefined program. The answer likely won’t come for another few months, as the company redirects most of the financial and human resources once dedicated to the C Series to other areas, including studies into a possible stretch of the 86-seat CRJ900, labeled internally as the CRJ900X, along with a longer variant of the 78-seat Q400 turboprop.

Bombardier’s goal had been to mount a stronger challenge to Embraer in the upper reaches of the regional aircraft market. By the start of the year Embraer carried a backlog of some 367 commercial jets, including 208 Embraer 190s and 195s–airplanes that occupy the very capacity segment from which Bombardier remains conspicuously absent.

Bombardier, meanwhile, now builds only six regional jets per month. After signing a deal in late January for three CRJ900s from Turkey’s Atlasjet, its firm order backlog stood at 109 CRJ700/900s as of the start of this month. Fortunately for the Canadian company, a resurgent turboprop market has increased the backlog for its Q Series line to 90, raising spirits at the Toronto assembly facility and maintaining a respectable revenue stream within the regional aircraft division.     

During a January 30 teleconference from Montreal, Bombardier Aerospace president and COO Pierre Beaudoin acknowledged that the company has set its sights on the segment now covered exclusively by the 100-seat Embraer 190. He offered few details about what form the regional jet project might take, however, nor did he place a definitive timeframe on its completion. He spoke in similarly vague terms about plans for a new turboprop, saying only that it would hold between 80 and 100 seats.

A stretch of the CRJ900, the CRJ900X could conceivably carry four more rows of seats, raising standard capacity from 86 to 94 passengers. A four-row stretch of the 70-seat CRJ700, which uses the same fuselage cross section as the 50-seat CRJ200, the CRJ900 already has tested the practical limits of a tube originally designed for a business jet, however. Few outside Bombardier would disagree that the E-Jet line’s larger, more comfortable cabin has contributed mightily to its early sales success.

Nevertheless, the CRJ900 has earned raves from Mesa Air Group CEO Jonathan Ornstein, who has called it by far the most economical jet type in the regional business. A derivative design would also take less time to develop, perhaps allowing Bombardier to join the race, albeit belatedly, before the market starts to saturate. If, as Beaudoin said, Bombardier’s inability to certify the C Series before 2010 ultimately led to the program suspension, it stands to reason that a new regional jet would face no less time pressure.

Under its new R&D new budget, scaled-back C Series studies will consume no more than $20 million over the next year. Bombardier president of commercial airplanes Gary Scott, hired specifically to shepherd the program through the certification process, will continue to lead the 50-member team left behind from the original C Series staff of 350.

Beaudoin confirmed that Bombardier has spoken with executives from Russia’s Sukhoi about some form of collaboration, but he wouldn’t elaborate on the substance of the talks. “We’re having discussions with different partners around the world, especially focused in potentially large markets such as India, Russia and China,” he said. “We have had discussions with Sukhoi as we have with many other potential partners.”

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