Pierre Beaudoin, the president of Canada's Bombardier Aerospace, believes there are reasons to be optimistic about the industry. He talks to Alan Peaford.
Q: Bombardier Aerospace has been producing new models just about every year. Is it now a period for consolidation?
A: We have achieved clear leadership in regional aircraft and business aircraft with a turnover of $5.2 billion and a backlog of $33 billon as of 31 July. We have done this by having a mix of new platform aircraft and derivatives of successful aircraft. We have invested more than $6 billion in new aircraft programmes in the last eight years.
We will continue to deliver new aircraft over the next few years – the Learjet 40 and the Learjet 45XR in 2004, the Global 5000 in 2005 and the Global Express XR5 in early 2006. Although there is the possibility of a new aircraft for the regional market we expect there to be more derivatives in the future.
Q: How do you see the market for regional jets?
A: We see the growth being in the 70-90 seat area and the 50 seater market staying constant or slowly dropping as airlines re-fleet. The finance of aircraft remains the biggest challenge.
Because the credit ratings of airlines have dropped it has made it harder for them to buy more regional jets that they clearly want and need. We need to find solutions to help them. The 70-90 seat is emerging as the fastest growing segment of the industry. We have already delivered 119 aircraft in this sector with positive results for higher frequency and lower trip costs.
Q: What about turbo-props?
A: There is renewed interest in turboprops. The very low trip cost of the Q400 has opened up new markets for low-fare carriers. Regional carriers are increasing capacity and passenger numbers and are in good financial shape.
Q: When you talk about a new aircraft for the regional jet market, is this the BRJ-X?
A: Yes. We are looking at this and continuing to study the 100-seat platform. We will not be in a position to make a decision on this for 12-18 months. We are looking at operating costs 15%-20% better than existing aircraft. This will need significant innovation to achieve this.
Q: Do you see the Middle East and Asia picking up on the regional aircraft growth?
A: Not for some time. The yields on these routes are different from those in Europe and the USA. I think we are some years away.
Q: Would that be improved if you were to look at a manufacturing tie-ups, perhaps in China?
A: We pioneered the idea of sharing our manufacturing with so many partners on projects like the Global Express. We are doing the same with the Challenger 300 with partnerships in Taiwan and the UK. We always look at opportunities. But we believe that manufacturing partnerships should start with components.
Q: How has the business aircraft market fared in the general downturn?
A: As GDP climbs in the USA the market and corporate profitability improves. Other indicators are also looking better. Fractional sales were down in 2002 but the industry is growing with 7,000 shareholders expected by 2007. The used aircraft inventory is declining from a 2001 high and there are 13,500 jets currently operating worldwide fuelling replacement demand.
Q: So how are you expecting to make the most of this?
A: We have the largest family of business jets with the most complete range of services. We lead the way in customer support. We offer the broadest range of services such as pilot and maintenance training – a combination only offered by Bombardier, Our worldwide service centre network is continuing to expand.
We are still bringing through new aircraft that will be leaders: the Learjet 40 with its superior performances flying further with more passengers than the competition; the Learjet 45 XR that will is making its international debut at the Dubai airshow; and the Challenger 300 entering into service this month and a clear best in class for value. With the Global 5000, the world's fastest intercontinental business jet, and the ultra-long-range Global Express XRS we are going forward with confidence.
Source: Flight Daily News