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Bombardier confident 'scope clauses' will not change

Bombardier is increasingly confident that so-called scope clauses in US pilot contracts will remain unchanged – a position that, if accurate, bodes well for sales of Bombardier's CRJs and CSeries aircraft, says a top executive.

Speaking to reporters on 25 September, the company's vice-president of regional aircraft Kevin Smith predicts market realities, including pilot shortages, increasing wages and strong profits will serve to block any efforts to alter scope clauses.

"There won't be any scope clause change," Smith says bluntly during the Regional Aircraft Association annual meeting in West Palm Beach.

Scope clauses largely prohibit major airlines' contracted regional carriers from operating aircraft with more than 76 seats or a maximum take-off weight (MTOW) of 39,010kg (86,000lb).

That MTOW cap prevents major airlines' regional carriers from operating two next-generation regional aircraft under development: Embraer's 175-E2 and Mitsubishi Aircraft's MRJ90.

Embraer has delayed E175-E2 entry-into-service in 2021, and Mitsubishi plans 2020 entry of its MRJ90.

Aircraft manufacturers and major airlines have sought to ease the cap so that partner carriers can operate the new aircraft, but pilot unions have pushed back, seeking to protect their work from being outsourced.

The restrictions could be eased when major airlines' pilot contracts come up for renegotiation between 2019 and 2020, but pilot unions have expressed unwillingness to budge.

Smith says market forces work in their favour.

He notes that regional airlines are struggling to hire enough cockpit crew amid an industrywide shortage of pilots. Pilot training classes, he says, are only about 60% full.

Meanwhile, regional airlines have increased pilots' pay, diminishing their cost advantage to major airlines, he adds.

At the same time, US airlines continue to reap significant profits, and therefore will be cautious about souring relations by pushing the scope clause issue, Smith says.

"If the there's a pilot shortage and the mainlines are making a ton of dough, why would they push… to have more regional jets while they can't crew them," he says. "There is no motivation from management… to push and to ask for more regional jets."

"Why are you going to buy them to park them," he says.

Bombardier has every reason to hope Smith's predictions prove correct.

All three models of the company's CRJ line – the CRJ700, CRJ900 and CRJ1000 – come in below the 39,010kg MTOW cap, making the type competitive with scope clauses unchanged.

Meanwhile, the roughly 110- to 130-seat CSeries fills the gap between 76-seat regional jets and roughly 130-seat narrowbodies made by Boeing and Airbus, Smith notes.

"Why would mainline management push to have more regional jets, upset the apple cart with mainline pilots… when they have this machine here," he says of the CSeries.

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