Improvement in Q400 supply chain aids production boost

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Bombardier's efforts to iron out supply chain challenges associated with its Q400 programme have borne fruit, with the airframer positioning itself to achieve an output similar to the level it produced during fiscal year 2007/08.

The Canadian manufacturer yesterday announced plans to cut Learjet and Challenger production rates, and layoff 1,360 workers, to offset dramatic reductions in business aircraft demand. However, it also said rising demand for its largest turboprop calls for an increase in production.

"We are in the process of moving Q400 fuselage production from Japan to China and Belfast, and that created some growing pains over the last year. Having recovered from the short-term supply chain difficulties experience, we expect to see improvements in deliveries this upcoming next quarter," says Bombardier.

It notes, however, that some challenges remain.

Although the airframer has not detailed its exact production rate for the Q400, it anticipates output to be similar to fiscal 2007/08 when Bombardier delivered 47 Q400s.

Its efforts could be further aided when production of Bombardier's Q200 and Q300 turboprops cease mid-year. However, the firm has not yet discussed the potential workforce transition to Q400 production.

"On the potential movement of employees from one aircraft to another, we're still building the smaller Q Series models and haven't announced any transitions," says Bombardier.

Bombardier's Q400 backlog for the end of fiscal year 2008/09 will be discussed when it releases its earnings on 2 April. At 31 October, backlog of the Q400 totalled 103.

The company believes the Q400 is well-positioned to attract business despite the current economic climate. To wit, Porter Airlines revealed this week that it may order additional Q400s.

Company CEO Robert Deluce told the Raymond James Growth Airline conference that "probably I shouldn't say this because there are Bombardier people here today, but we may be placing an order for more. Some discussions will have to take place first".

The carrier should have 18 of the 70-seat turboprops in service by year end, he says.