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American Airlines Near Deal for Bombardier's Neglected Small Jets

‎May‎ ‎2‎, ‎2018‎ ‎8‎:‎02‎ ‎AM
  • Order of CRJ900 aircraft would have list value of $700 million
  • Airline is shifting to bigger planes at short-haul affiliates


American Airlines Group Inc. is nearing an order for about 15 regional jets fromBombardier Inc. with options to buy more, people familiar with the matter said.

A deal for the CRJ900 aircraft is likely to be announced as soon as Thursday, when Bombardier reports first-quarter results, said one of the people, who asked not be named because the discussions are private. The sale would have a list value of about $700 million before customary discounts for aircraft purchases.

An order from the world’s largest carrier would give a boost to the venerable CRJ program, which Bombardier has acknowledged neglecting as the company invested $6 billion in developing its all-new C Series single-aisle jetliner. As Bombardier worked on the C Series, its regional jets lost ground to Embraer SA, which is equipping its latest planes with upgraded engines.

There’s no guarantee the deal will be finalized, one of the people said. American and Bombardier declined to comment.


American, which already flies aircraft from both Bombardier and Embraer, has been shifting to bigger regional jets with two passenger classes to better match the on-board offerings of its larger single-aisle planes. American has also reduced the number of 50-seat aircraft it flies.

Regional Fleet

The Fort Worth, Texas-based airline has added about 200 dual-class regional jets over the past four years. At the end of 2017, American had 118 CRJ900 aircraft operated by regional affiliates PSA and Mesa airlines. American last acquired CRJ900s in February 2015, signing an order for 24 planes.

Bombardier is trying to capitalize on the aging regional jets now flying in the U.S. According to a market forecast the company released last year, North American airlines will need to retire about 2,100 aircraft of 150 seats or fewer by 2036. Forty percent of the current fleet is at least 15 years old, Bombardier said.

The Montreal-based planemaker has refreshed the CRJ by designing a new cabin, called Atmosphere, that offers mood lighting and bigger overhead bins. A deal with American would represent Bombardier’s first sale of regional jets since an unidentified customer agreed in late December to buy at least six CRJ900s, with options for six more.


The Canadian manufacturer has delivered more than 1,000 units of the CRJ since it created the regional jet category in the early 1990s.

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American orders 15 E175s and 15 CRJ900s

  • 03 May, 2018
  • SOURCE: Flight Dashboard
  • BY: Jon Hemmerdinger
  • Boston

American Airlines has ordered 15 Bombardier CRJ900s and 15 Embraer 175 regional jets, deals with a combined list-price value of roughly $1.4 billion.

Deliveries of the CRJ900s with 76 seats to American subsidiary PSA Airlines will begin in the second quarter of 2019, Bombardier says in a media release.

The Bombardier commitment, including an additional 15 CRJ900 options, has a value at list prices of $719 million.

The Canadian airframer will outfit the aircraft with the company's new "Atmosphere" cabin, which includes overhead bins that can accommodate large roller bags.

Embraer will deliver the 15 E175s with 76 seats to American subsidiary Envoy from March 2019 to November 2019, the manufacturer says.

That deal, including options for 15 more E175s, has a value at list prices of $705 million. It follows an order by American for 10 E-Jets in October 2017.

American will use the E175s to replace smaller regional jets in its feeder fleet, the carrier says.

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Bombardier to close Downsview and move Global work to Pearson

  • 03 May, 2018
  • SOURCE: Flight Dashboard
  • BY: Jon Hemmerdinger
  • Boston

Bombardier has reached agreements to sell its assembly site at Downsview near Toronto and open a new Global business jet assembly site at Toronto Pearson International airport.

"As part of Bombardier's five-year turnaround plan, we have been reviewing our facilities worldwide to ensure we have the most-efficient and cost-effective operations necessary to support our growth objectives," Bombardier chief executive Alain Bellemare said during the company's first-quarter earnings call today.

Bombardier had previously expressed interest in divesting Downsview, and now confirms it will sell the property to Canada's Public Sector Pension Investment Board for $635 million.

Accounting for transaction and other costs, the deal will pump $550 million into Bombardier's cash reserves, it says.

"This cash infusion significantly strengthens our balance sheet," Bellemare tells investors.

The company expects that the sale will close in the second quarter.

But Bombardier will operate the site up to three years after closing, and has options to remain at Downsview for two years after that, it says.

Bombardier assembles Q400 turboprops and Global business jets at Downsview, a site surrounded by dense development about 14km from downtown Toronto.

The site had previously been operated by de Havilland Canada and has operated for about 80 years.

Bombardier says it uses only 10% of the Downsview real estate.

While it will exit Downsview, Bombardier has reached an agreement to lease 15 hectares (38 acres) at the Toronto Pearson International airport, where it will open a new Global business jet final assembly plant, Bombardier says.

Bombardier has not articulated post-Downsview plans for its Q400. The company has 55 outstanding Q400 orders, it says.

Asked about the Q400's future, chief financial officer John Di Bert notes that Bombardier has as long as five years to form a plan.

"We will look at the overall footprint… and make the right decisions about how and where we will drive production for the Q," he said during the earnings call.

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  • 4 weeks later...

Big surprise in the business jet market: Bombardier unveiled upgraded versions of its Global 5000 and 6000 jets at a biz jet show in Geneva Sunday might. The big surprise is that the development it was done in secret, with an already certified new RR engines - the PEARL series. The planes will known as the Global 5500 and 6500, and the all new Global 7000 will be renamed the 7500. The 5500 and 6500 will start to enter customer service by the end of 2019. The revamped 5500 and 6500 will have new engines for up to 600 nm extra range and a 13 percent lower fuel burn, so I think we can call the Global neos. And they will have some of the interior upgrades developed for the ultra long haul 7500. The Global 8000 rounds out the Bombardier biz jet offer.



Bombardier launches two new business jets in bid to take on rivals

In a surprise move aimed at improving its competitive position against Gulfstream and other rivals, Bombardier Inc. is launching two new large-cabin luxury jets as it bets on a recovery in business aircraft.

The Canadian plane and train maker has been secretly testing the two jets, which will be known as the Global 5500 and Global 6500 aircraft, since the beginning of the year at its facilities in Wichita, Kan. The company unveiled the existence of the planes at an industry event in Geneva on Sunday evening. It plans to get them into service by the end of next year.

″[There are] a lot of shocked faces … tonight to say the least,” Bombardier spokesman Mark Masluch said by phone from Europe. “We’re hoping that we have a winner here with these two products when we have a full rebound of the market.”


Alain Bellemare, Bombardier’s chief executive, is counting on the Global line of business jets to help drive his five-year turnaround effort as the company cedes control of its C Series commercial airliner to Airbus SE and shifts its focus to luxury aircraft and trains. The company expects its marquee Global 7000 plane, the world’s biggest purpose-built private jet, to help increase its business jet sales by US$3-billion to US$8.5-billion by 2020. Margins on Bombardier’s private jets should range between 8 per cent and 10 per cent by that time, the company estimates.

Adding two new private jet models is something Bombardier needed to bring the overall quality of the Global aircraft portfolio closer to the level of the flagship 7000, Mr. Masluch said. The new planes improve on the existing Global 5000 and 6000 models by offering up to 600 nautical miles of additional range and 13 per cent better fuel burn, according to Bombardier. They also offer better performance when operating in hot weather and high altitude conditions, the manufacturer says.


The interiors of the new jets, meanwhile, will feature many of the high-end finishes to come in the Global 7000. That includes Bombardier’s patented Nuage seat, which luxury journal Robb Report says distinguishes itself particularly with its innovative reclining system. List price for the Global 5500 starts at US$46-million while the 6500 starts at US$56-million.

There is no change to manufacturing sites for the new aircraft and no significant additional capital spending to come beyond what has already been disclosed to the market, Mr. Masluch said. Development costs for the new jets are “already mostly behind us,” he said. The jets will share a production line with the current 5000 and 6000 planes.

“It’s a pretty impressive and necessary response to Gulfstream’s 500/600 line,” Richard Aboulafia of the Teal Group aerospace consultancy said of Bombardier’s moves. “It’s also impressive that they’ve been working on it this long while keeping it under wraps. This shows the company is now able to give priority to its business jet unit.”

Manufacturers are hoping new products will rekindle demand for private jets after the worst down-cycle for luxury aircraft since the 1980s. The five major business jet makers plus Boeing Co. and Airbus delivered 113 private jets in the first quarter of 2018, down 5.8 per cent year-over-year, according to a monthly analysis of the market published May 22 by JP Morgan analyst Seth Seifman.

“With used jet inventory levels approaching ever-lower levels, a new bizjet cycle should be upon us – if macro conditions co-operate,” Mr. Seifman said.


Rolls-Royce Holdings PLC will deliver a new engine called Pearl specifically for the new Global planes, Bombardier said Sunday. Certification of the engine from regulatory authorities has already been obtained. The aircraft will also feature a modified wing.

In all, Bombardier will offer six different models in its Global jet family. The Global 7000 is expected to be rechristened as the Global 7500 to maintain consistent marketing as the 500-series of planes are sold as the top-of-the-line products. A Global 8000 will round out the portfolio.

“This is a progressive investment in business jets,” said Chris Murray, an analyst with AltaCorp Capital in Toronto. ”[It allows Bombardier to] maintain a competitive product offering at the higher end of the market, which looks to be the most robust and profitable section of the industry.“

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