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Second cut in CRJ200 production reflects swing to larger aircraft

Bombardier has cut CRJ200 production for the second time in two months, and reduced its forecast demand for 50-seat regional jets as the market swings towards larger aircraft.

The Canadian manufacturer will produce 54 CRJ200s in its 2005-6 fiscal year beginning on 1 February, down from the 68 planned as recently as October and less than half the peak rate of 120 a year. Production of the 70/86-seat CRJ700/900 will remain steady at 77 aircraft next year, says Paul Tellier, chief executive.

The company's 20-year forecast for deliveries of 50-seat regional jets is "in line" with rival manufacturer Embraer's recently revised, and reduced, estimate of "around 1,900 aircraft" says Bombardier Aerospace president Pierre Beaudoin. "Forecast demand for new 50-passenger regional jets has come down as the growth is behind us. But we see see growth in 70- to 90-passenger jets."

With increased business jet deliveries offsetting the rapidly falling CRJ200 production rate, Bombardier's aerospace sector managed to narrow its third-quarter loss to $7 million from $12 million in the last quarter, but well down on the $121 million profit a year earlier.

Aerospace revenues slipped to $1.63 billion from $1.72 billion a year earlier, with a $322 million reduction in regional aircraft manufacturing revenues being offset by a $220 million increase in business jet sales.

Bombardier delivered 41 regional aircraft in the third quarter, down from 54 a year earlier. CRJ200 deliveries dropped from37 to 22, but CRJ700/900 andQ-Series turboprop deliveries wereessentially flat. Business jet deliveries increased to 28 from 15 a year earlier.

Bombardier booked 40 net business jet orders in the third quarter, up from 19 a year earlier, taking its total for the first nine months of its 2004-5 fiscal year to 100 aircraft, compared with 43 at the same time last year. Production for 2005 is essentially sold out, says Beaudoin.

Regional aircraft net orders were also up for the third quarter, from 35 to 50, boosted by 20 orders for the Q300.

Orders for the first nine months were up from 102 to 121. The firm backlog at the end of the third quarter was 284 aircraft.

GRAHAM WARWICK / WASHINGTON DC

 

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