Bombardier halts production of 50-seat jet

FlyinPiker

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UPDATE 3-Bombardier halts production of 50-seat jet
Fri Oct 28, 2005 12:05 PM ET
(Adds details, background, analyst view. In U.S. dollars unless noted)
By Robert Melnbardis
MONTREAL, Oct 28 (Reuters) - Bombardier Inc. (BBDsvb.TO: Quote, Profile, Research) said on Friday it will halt production of its 50-seat CRJ200 jet, as an aircraft market stung by U.S. airline bankruptcies moves toward larger-capacity regional jets.
Bombardier said the suspension of production of the 50-seat regional jet will begin in mid January. It did not say when production might resume.
It said it will also proceed with a previously planned layoff off 660 workers in Montreal and Belfast, Northern Ireland.
The company added that it expects this fiscal year's aircraft delivery total to roughly match the 329 it sent to customers the previous year.
Production of the Challenger 850 business jet, which is derived from the CRJ200 platform, is not affected by its plans to stop making the 50-seater, it said.
Bombardier, the world's third-largest civil aircraft maker and No. 1 manufacturer of trains, said it expects to profit from a strong business jet market. It also makes a turboprop aircraft line.
Bombardier's class B shares dropped 17 Canadian cents, or 6.4 percent, to C$2.48 on the Toronto Stock Exchange on Friday morning.
The shares have fallen almost 20 percent over the past month on concerns about Bombardier's ability to ramp up orders for its 70- and 90-seat regional jets.
In a research report published on Friday, Peter Rozenberg, analyst at UBS Investment Research, said the production halt is negative news for Bombardier, but should have limited impact on its financial results.
He sees a surplus of about 100 50-seat regional jets in the market, stemming largely from the recent bankruptcies of Delta Air Lines Inc. (DALRQ.PK: Quote, Profile, Research) and Northwest Airlines Corp. (NWACQ.PK: Quote, Profile, Research) , and financial difficulties at others such as Independence air parent FLYi Inc. (FLYI.OQ: Quote, Profile, Research) .
Increased passenger traffic, lower yields and more relaxed pilot scope clauses are driving regional airlines toward larger capacity aircraft, Bombardier said.
The company will go ahead next month with the remaining 660 job cuts that were part of 1,135 layoffs announced in August for its plants in the Montreal area and Belfast.
The 660 layoffs represent 2.5 percent of the 26,800 people employed in Bombardier's aerospace division.
Bombardier has 30,000 workers at its train division, where is has already completed the bulk of 7,600 jobs cuts.
In August, Bombardier had said it would cut back deliveries of its 50-seater -- which launched the regional jet industry some 13 years ago -- to 18 in the fiscal year ending January 2007 from 54 in the current fiscal year.
The company's 70 and 90-seat jets are stretch versions of the CRJ200. It is also considering whether to proceed with the $2-billion development of a new 110- to 130-seat jet.
The production halt announcement comes just a day after Bombardier said it will invest $200 million to build an aircraft plant in Queretaro, Mexico, creating 600 jobs there by the end of 2007. The company also said on Friday it will resume production of its 415 amphibious firefighting aircraft, commonly known as the water-bomber.
 

"GO AROUND"

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That was almost a forgone conclusion. Question is, is how do you turn a 50 into a 70?

Saw a Q&a answer the other day that ASA wants to flip it's RJ fleet. Today it's 80%/20%, 50 seat to 70 seat. Jerry or Brian said they want it to be 80% 70 seaters and 20% 50 seaters in the future.
 

synchoff

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GO AROUND said:
That was almost a forgone conclusion. Question is, is how do you turn a 50 into a 70?

.
Simple. Just follow the Delta Model!

1. Enter bankruptcy

2. Slowly shut down Comair (with like, 150+ CRJ 200's)

3. Give all the business to carriers like Mesa, who fly 700's and 900's for less than what Comair pilots will fly a 200.

I WISH I were kidding.
 

Steveair

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Ole Bombardier is following in Embraer's footsteps. I believe they've stopped builing the 135/145s.
 

nimtz

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Steveair said:
Ole Bombardier is following in Embraer's footsteps. I believe they've stopped builing the 135/145s.
Nope. XJT still has at least ten to go.
 
S

silver8

synchoff,

I wish you were kidding too. Delta is reducing Comair flights and giving them to Freedom Airline! Yup, Freedom will have 28 departures out of MCO come December. I also believe that Delta is runing Comair into the ground. What a shame, Comair used to be one of the best regionals and was the Wallstreet darling.
 

"GO AROUND"

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sliver8 said:
synchoff,

I wish you were kidding too. Delta is reducing Comair flights and giving them to Freedom Airline! Yup, Freedom will have 28 departures out of MCO come December. I also believe that Delta is runing Comair into the ground. What a shame, Comair used to be one of the best regionals and was the Wallstreet darling.
That's 1/2 of 1% of what Comair does. Do you know what it would take to replace Comair on all they do? A lot more than Mesa/ Freedom could ramp up to do let alone getting the 70+ seaters you say the will fly. You act like this is gonna happen in a week. Keep spinning the situation to stir the pot.
 

Dodge

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sliver8 said:
synchoff,

I wish you were kidding too. Delta is reducing Comair flights and giving them to Freedom Airline! Yup, Freedom will have 28 departures out of MCO come December. I also believe that Delta is runing Comair into the ground. What a shame, Comair used to be one of the best regionals and was the Wallstreet darling.
Now, I know Mesa's contract is pretty poor in many areas, but..........was Comair one of the best regionals when it took $10,000+ to get to attend Indoc class?
 

Propblast

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synchoff said:
Simple. Just follow the Delta Model!

1. Enter bankruptcy

2. Slowly shut down Comair (with like, 150+ CRJ 200's)

3. Give all the business to carriers like Mesa, who fly 700's and 900's for less than what Comair pilots will fly a 200.

I WISH I were kidding.
Actually Delta is just copying the United model (ala: ACA/IDE and AWA). Coincidentally, that flying went to the same bottom feeders as the DC flying.

-PB
 

Propblast

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synchoff said:
Simple. Just follow the Delta Model!

1. Enter bankruptcy

2. Slowly shut down Comair (with like, 150+ CRJ 200's)

3. Give all the business to carriers like Mesa, who fly 700's and 900's for less than what Comair pilots will fly a 200.

I WISH I were kidding.
Actually Delta is just copying the United model (ala: ACA/IDE and AWA). Coincidentally, that flying went to the same bottom feeders as the DC flying.

-PB
 
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