Canadian airframer Bombardier warned yesterday that it expects deliveries of its CRJ regional jet family to fall to about 80 this year, as the company shifts emphasis to the buoyant business jet sector.

Corporate jet deliveries accounted for a little over 55%, or 186 units, of the manufacturer’s fiscal 2006 delivery schedule (ending 31 January), a 15 percentage point increase on the same period a year earlier. At the same time regional aircraft deliveries - both jets and turboprops - dropped from the 200 units recorded in fiscal 2005 to 149 units in fiscal 2006. Notably, regional jet deliveries fell from 178 units in fiscal 2005 to 121 aircraft in fiscal 2006.

This decline will continue into its fiscal year 2007, which began on 1 February. According to Bombardier Aerospace president and chief operating officer Pierre Beaudoin, regional aircraft sales will account for about 134 of the 335 or so deliveries forecast for this fiscal year. Of this amount, CRJs will account for 60% of all regional aircraft deliveries, or just 80 aircraft.

“[In fiscal 2006] regional aircraft represented 45% of our deliveries, and [in fiscal 2007] this will go down to 40%,” says Beaudoin, noting that overall delivery levels will be flat year-on-year.

“The difference will come from the growth from business jets, and more turboprop [deliveries],” he adds.

These changes to Bombardier’s delivery schedule are reflected in its backlog, which has firm orders for 17 CRJ200s (although this line is no longer in production), 51 CRJ700s and 23 CRJ900s; a total of 91 aircraft. The 17 50-seaters may be converted to the manufacturer’s larger jets, says Bombardier. Including options and other conditional orders, the manufacturer says it has 713 regional jets in its backlog.

Bombardier’s firm backlog also includes two Q200 turboprops, 20 Q300s and 64 Q400s. The manufacturer does not disclose its corporate jet orders. Although Bombardier admits the sluggish regional jet market - which is overly dependant on the US airline industry - is worrying, its higher margin corporate aircraft contributed to a 31% year-on-year rise in the aerospace unit’s operating income to $266 million. This was achieved on a 1.3% revenue growth to $8.09 billion.

The aerospace unit’s increase financial performance also helped its parent company turn an $85 million fiscal 2005 net loss into a $249 million fiscal 2006 net profit.

Bombardier Aerospace was unable to fully replicate the full year performance in the fourth quarter, with revenue falling 8.8% year-on-year to $2.4 billion. However, operating income in the three months to January 31 rose 25.9% to $107 million and the entire company’s quarterly net income grew 53.6% to $86 million.

“A year ago, we said we would improve our profitability through an unrelenting focus on costs, on product innovation and on customer needs,” says Bombardier chairman and chief executive Laurent Beaudoin. “The result is that we’re back to profitability. We increased our cash position and our free cash flow generation. We also reduced our debt by some $2.5 billion, and in so doing, decreased risk and strengthened our balance sheet.”

He adds: “We dealt with the changing business environment. In aerospace, we adjusted our production rates to match the increased demand for our business jets and turboprop aircraft and lower demand for 50-seat regional jets.

“This year’s results indicate that we’re doing the right things to restore Bombardier’s earnings power and solidify our financial position.”


Source: Flight International