Interesting article in today's New York Times...(what the heck is "Air Trans?" If the reporter meant AirTran, well they're hardly a "regional.")
Bombardier Considering a New Line of Jets
[size=-1]By BERNARD SIMON[/size]
Published: June 2, 2004
ONTREAL, June 1 - Bombardier, the aircraft and rail car maker, expects to decide by early next year whether to add a family of passenger jets to directly compete with the Boeing Company and the European Airbus consortium, Paul M. Tellier, the company's chief executive, said on Tuesday.
The proposed series would be made up of three models with a capacity of 100 to 130 passengers. The fleet would be larger than Bombardier's CRJ series of commuter jets, which have helped it transform over the last decade into the world's third-biggest aircraft maker, after Airbus and Boeing.
Bombardier makes three versions of the CRJ, seating 50 to 86 passengers. The CRJ was developed as a stretched version of Bombardier's Challenger business jet, but the company has said that a plane of the size it is considering needs to be designed from scratch.
Bombardier also makes the Learjet and Global Express corporate jets.
Mr. Tellier told shareholders at Bombardier's annual meeting in Montreal, where the company is based, that a decision would require "a well-defined market, a solid profit potential and major comparative advantages in terms of operational efficiency."
Suzanne Betts, an analyst at Argus Research in New York, said that the most likely buyers of the new Bombardier aircraft would be regional airlines in the United States, like SkyWest and Air Trans, which are in far better financial health than the mainline carriers.
"There is definitely growth in that smaller, point-to-point market," Ms. Betts said. A Bombardier spokesman said that the company was also focusing on airlines seeking to replace older, bigger jets, like the MD-80, which was produced by McDonnell Douglas before it was acquired by Boeing, but is no longer in production.
Still, Glenn Engel, an analyst at Goldman, Sachs in New York, said that many big airlines, which have been Boeing and Airbus customers, may be reluctant to deal with a third manufacturer.
Mr. Tellier said that Bombardier expected to spend $18 million on the feasibility study this year. About a third of the cost of developing the aircraft would be borne by Bombardier, he said, with the rest coming from suppliers and other partners.
Bombardier's chief rival in the regional jet market, Embraer of Brazil, is scheduled to begin delivery next year of a series of aircraft similar in size to that proposed by Bombardier. JetBlue Airways, whose fleet currently comprises 156-seat Airbus A-320s, has ordered up to 200 of the new Embraer series 190 planes, with 100 seats each.
Demand for Bombardier's smallest regional jet, the 50-seat CRJ-200, has fallen off. The company said last week that it would trim production by about 20 planes over the rest of this year. Mr. Tellier said Tuesday that this cutback implied a bigger reduction for 2005 as a whole.
Bombardier surprised analysts last week by reporting a first-quarter loss of $174 million, which it ascribed chiefly to technical problems and production delays in its rail car divisions. It delivered 47 regional aircraft in the three months to April 30, and has orders for another 300 planes.
Bombardier Considering a New Line of Jets
[size=-1]By BERNARD SIMON[/size]
Published: June 2, 2004
The proposed series would be made up of three models with a capacity of 100 to 130 passengers. The fleet would be larger than Bombardier's CRJ series of commuter jets, which have helped it transform over the last decade into the world's third-biggest aircraft maker, after Airbus and Boeing.
Bombardier makes three versions of the CRJ, seating 50 to 86 passengers. The CRJ was developed as a stretched version of Bombardier's Challenger business jet, but the company has said that a plane of the size it is considering needs to be designed from scratch.
Bombardier also makes the Learjet and Global Express corporate jets.
Mr. Tellier told shareholders at Bombardier's annual meeting in Montreal, where the company is based, that a decision would require "a well-defined market, a solid profit potential and major comparative advantages in terms of operational efficiency."
Suzanne Betts, an analyst at Argus Research in New York, said that the most likely buyers of the new Bombardier aircraft would be regional airlines in the United States, like SkyWest and Air Trans, which are in far better financial health than the mainline carriers.
"There is definitely growth in that smaller, point-to-point market," Ms. Betts said. A Bombardier spokesman said that the company was also focusing on airlines seeking to replace older, bigger jets, like the MD-80, which was produced by McDonnell Douglas before it was acquired by Boeing, but is no longer in production.
Still, Glenn Engel, an analyst at Goldman, Sachs in New York, said that many big airlines, which have been Boeing and Airbus customers, may be reluctant to deal with a third manufacturer.
Mr. Tellier said that Bombardier expected to spend $18 million on the feasibility study this year. About a third of the cost of developing the aircraft would be borne by Bombardier, he said, with the rest coming from suppliers and other partners.
Bombardier's chief rival in the regional jet market, Embraer of Brazil, is scheduled to begin delivery next year of a series of aircraft similar in size to that proposed by Bombardier. JetBlue Airways, whose fleet currently comprises 156-seat Airbus A-320s, has ordered up to 200 of the new Embraer series 190 planes, with 100 seats each.
Demand for Bombardier's smallest regional jet, the 50-seat CRJ-200, has fallen off. The company said last week that it would trim production by about 20 planes over the rest of this year. Mr. Tellier said Tuesday that this cutback implied a bigger reduction for 2005 as a whole.
Bombardier surprised analysts last week by reporting a first-quarter loss of $174 million, which it ascribed chiefly to technical problems and production delays in its rail car divisions. It delivered 47 regional aircraft in the three months to April 30, and has orders for another 300 planes.