Bombardier's decision to sell two commercial aircraft could benefit its already-successful business jet unit and see the venerable Dash 8 find new life under Viking Air.
But the Q400 and CSeries sales also suggest Bombardier may exit commercial aircraft entirely by selling its CRJ, a programme that could prove attractive to burgeoning airframers.
"Viking is a natural… They are creating an interesting turboprop enterprise," says Richard Aboulafia, vice-president at consultancy Teal Group. "Are we seeing the birth of a new airliner OEM?"
His comments follow Bombardier's 8 November announcement of plans to sell its Dash 8 programme (including the Q400 and related assets) to Viking Air affiliate Longview Aviation Capital.
Having sold majority CSeries ownership to Airbus in July, the CRJ would become Bombardier's only commercial aircraft.
Bombardier also plans to slash 5,000 jobs and shift focus to its rail, business aircraft and aerostructures businesses, chief executive Alain Bellemare recently said.
Analysts think the Dash 8 will be in capable hands if sold to the Viking Air affiliate as expected in the second half of 2019.
Viking has reinvigorated other low-production former Bombardier turboprops like CL fire bombers and Twin Otters.
Fast and powerful, the Q400 has enjoyed recent sales success. Some 525 remain active and backorders stand at about 60 aircraft, according to Flight Fleets Analyzer.
Analysts wonder if Viking will update the Q400, perhaps adding a new engine or developing new variants, or stretching the aircraft.
"Will they be caretakers to the Dash 8, or will they make an enterprise out of this?" Aboulafia says of Viking. "Maybe they can make a go at it."
Perhaps Viking might develop Q400 variants for border patrol, medivac or reconnaissance work, says Addison Schonland, partner at consultancy AirInsight Group.
A 55-seat passenger-cargo combi might appeal to Twin Otter operators or carriers in India and Africa, he says.
As for the CRJ, Bellemare insists Bombardier will still "actively participate" in regional jet sales. But the company needs cost concessions from suppliers to turn around the money-losing programme, he says, adding that "strategic options" remain on the table.
That language suggests openness to selling the CRJ should suppliers not deliver, analysts say.
But who would buy a programme with only 55 backorders?
Actually, the CRJ's value lies primarily with its global support network and tight relationships with buyers, particularly US buyers, says Schonland.
Such assets could prove valuable to Mitsubishi Aircraft as it sells its MRJ, Schonland suggests.
Indeed, many Bombardier staffers recently took jobs with Mitsubishi Aircraft and its partners, according to a lawsuit Bombardier filed this year against Mitsubishi Aircraft.
Mitsubishi Aircraft might welcome a base in Montreal, hire former CRJ workers and likewise demand cost cuts, he says.
Commercial Aircraft Corporation of China (Comac), which makes the ARJ21, might also have interest. The ARJ21 has the same GE Aviation CFM34 engines as the CRJ.
"You are not buying the CRJ because of the tube and the engines… You are buying that whole structure globally," he says.
Schonland suspects airlines have a dog in the fight. They might order more CRJs partly to maintain competition and stave off price hikes by Embraer.
CRJ aside, Bellemare shows no interest in dropping Bombardier's aerostructures unit, which includes the Northern Ireland sites that supply parts for A220s, Learjets, Challengers and Globals.
The aerostructures business generated $430 million third quarter revenue, up 23% year-on-year.
BACK TO BUSINESS
Comparatively, Bombardier's business aircraft unit seems a model of stability. With a nine-model lineup, it holds among the broadest portfolios among peers and is poised for growth.
"Bombardier sees a much better business case for investing in the business jet market, with higher margins, stronger pricing and a path to being number one in the segment," says aerospace analyst Rolland Vincent.
Bombardier is “encouraged” by market activity, with third quarter orders exceeding revenue by $200 million, Bellemare says. The division ended the period with an “industry leading” backlog valued at $14.3 billion, says chief financial officer John Di Bert.
Bombardier's Global 7500 is leading the charge. The $72 million, 7,700nm (14,245km) range twin recently received Canadian and US certifications, ending Bombardier's “heavy investment cycle”. The GE Aviation Passport-powered aircraft, which has the largest cabin and longest range of any traditional business jet, is helping boost Bombardier’s profitability, with a backlog of more than 100 aircraft.
Bombardier expects to deliver a couple 7500s this year, then boost production to 15-20 aircraft in 2019 and to 40 aircraft in 2020.
“It’s a premium aircraft and… sells like a premium aircraft. So that should pull the margins for BBA upward,” says Di Bert, citing rates of “10% plus” in 2021 onwards.
Bombardier also expects a boost from its Global 5500 and 6500, set to enter service next year. The Rolls-Royce Pearl 15-powered 5500/6500 have new cabins, avionics and wings, built by Mitsubishi Heavy Industries.
Derivative designs like the 5500/6500 are “good examples” of what might come next from Bombardier, says Vincent.
Bombardier indicates much of its aerospace engineering team will move to its business aviation division.
“This will ensure that [the unit] has all the necessary capabilities to continue leading innovation,” says Bellemare.
The Challenger family are upgrade contenders, and Bombardier could launch a large cabin offering in the 4,000-4,500nm-range market, countering Textron Aviation’s Hemisphere.
Bombardier insists its 7,900nm-range Global 8000 remains part of its development programme, but the company might struggle to justify the update expense unless the aircraft gets a significant range boost.
Also uncertain is the Learjet 70/75, which has sold in low volumes but now has updated Garmin G5000 avionics. There remains “magic in the Learjet brand”, but Bombardier has not successfully tapped that value recently, Vincent says.
FlightGlobal reporter Kate Sarsfield contributed to this report.
Source: Cirium Dashboard