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Senator Leo Housakos blames opposition to Toronto airport expansion for Bombardier's failures and Montreal job losses.

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Oh, my. Is Montreal still upset that it's no longer the premier city of Canada?

Such a BS article.

I love the parts about being so 'tranquil' here. Moose and beavers and wildlife galore. Almost like Algonquin Park, but with luxury condo dwellers.

So is the rationale that we expand the airport - buy new planes - save Montreal?
 
Porter's wasn't going to buy a lot of jets, perhaps as many as 30. That's equal to three months of production for the similarly sized Boeing 737. What the hell was Bombardier going to do when that order was done? Will Air Canada's order of 45 units make this a success?

Bombardier is going to get killed here, once they make any headway in the 110 seat narrow body jet biz, Boeing and Airbus will modify their existing 737 and A320 to steal their marketshare.
 
Admiral Beez said:
Porter's wasn't going to buy a lot of jets, perhaps as many as 30. That's equal to three months of production for the similarly sized Boeing 737. What the hell was Bombardier going to do when that order was done? Will Air Canada's order of 45 units make this a success?

Bombardier is going to get killed here, once they make any headway in the 110 seat narrow body jet biz, Boeing and Airbus will modify their existing 737 and A320 to steal their marketshare.
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Several points where you're wrong

1) 30 jets is 10% of Bombardier's pre-first delivery target of 300 frames. Hardly insignificant. That said, it's hardly the threat that killing BBD.

2) The CS300 is sized the same as an A319, not the A320. And Bombardier is outselling the Boeing 737-7 Max and the A319 NEO combined. The CS100 is sized the same as an Airbus A318 or Boeing 737-600 or the Embraer 195. The A318 and B737-600 didn't sell well because they were way too heavy for what they did. The E195 did sell well. And the CS100 beats that platform on efficiency. The 110 seat market is just not profitable for Boeing and Airbus, and they are dropping it with their next-gen MAX and NEO families. On the other hand, the CSeries wing is sized for a hypothetical CS500, which could directly challenge the real money-makers: the Boeing 737-800 and Airbus A320. That next development needs capital though.

3) Airbus has resorted to selling the larger size A320 at a high discount (perhaps even a loss) to try and kill Bombardier. Their CEO has said he won't let Bombardier do to Airbus what Airbus did to Boeing (which is grow from the bottom). That said, Airbus can only continue the practice for so long, since the CSeries has a 20% operating cost advantage against similar Boeing and Airbus families. So now Airbus CEO has resorted to suggesting that the CSeries will be an orphan fleet when Bombardier goes bankrupt. I find it incredible that Canadians are not in the least bit interested to responding to a state owned enterprise (Airbus) resorting to open economic warfare with a Canadian company.

4) Bombardier's mismanagement is what tanked this project. Original in-service date was before the Airbus' A320NEO (first delivery planned in 2013). That early entry would have definitely showcased the platform with launch customers and as the real-life numbers rolled in, so would orders (lots of airlines don't like buying early). Unfortunately, with three years worth of delays, Bombardier is now at least 8 months behind Airbus.

The good Senator should point the finger at Bombardier management. Specifically the C-Suite filled with family loyalists running Bombardier. They've done more damage than cancelling the Porter order ever could.

Bombardier will recover. The plane has been described as technically superior by every airline that has studied it. It's extremely fuel efficient, more comfortable (pax space) than anything in service in that class, and quiet enough to meet the most exacting noise standards (such as those at London City). But no airline is going to place more orders without seeing the plane in service and knowing there's a well capitalized company behind the product that will ensure the spares, service and training pipelines are going to be there for 30 years.
 
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kEiThZ said:
I find it incredible that Canadians are not in the least bit interested to responding to a state owned enterprise (Airbus) resorting to open economic warfare with a Canadian company.

4) Bombardier's mismanagement is what tanked this project.
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Perhaps the second accounts for the first.

Look, out of national pride I would love for Canada to have a world-class aviation/aerospace company. Ditto for a world-class manufacturer of mass-transit vehicles. But it is really hard to feel much pride in Bombardier in either of those areas, due solely to their own mismanagement. And it is especially galling when it is suggested the public should bail out a company with poorly managed projects just because they are Canadian.
 
Tulse said:
Perhaps the second accounts for the first.

Look, out of national pride I would love for Canada to have a world-class aviation/aerospace company. Ditto for a world-class manufacturer of mass-transit vehicles. But it is really hard to feel much pride in Bombardier in either of those areas, due solely to their own mismanagement. And it is especially galling when it is suggested the public should bail out a company with poorly managed projects just because they are Canadian.
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I understand the sentiment. But compare that to the mentality in the US or Europe. They don't throw Boeing or Airbus to the curb when they have cost over-runs. The A380, for example, was a vanity project which had a terrible business case, and may never make money. The EU backstopped Airbus with a loan for it.

I'm not advocating for a blank cheque to Bombardier. But the business case for the CSeries is actually reasonably solid. Even with fierce competition from Boeing and Airbus. All they need is cash flow to get through their early deliveries.
 
kEiThZ said:
the business case for the CSeries is actually reasonably solid. Even with fierce competition from Boeing and Airbus. All they need is cash flow to get through their early deliveries.
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So if the business case is so solid, why can't they get financing from the market? Why does the public purse have to bail them out?
 
Tulse said:
So if the business case is so solid, why can't they get financing from the market? Why does the public purse have to bail them out?
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The question in the market seems to have been do they have a strong enough balance sheet to see this through.....not a question about the planes themselves. The delays and cost overruns on the C Series were nothing unusual on an totally new aircraft and would likely not have created a blip at all. What the combined effects of the Quebec gov't investment and the Air Canada order have done is give the markets some assurance that the company will be there to see the whole project through to maturity. From a low of $0.72/share, the widely held class B shares have increased since the layoff/AC order announcement to trade at $1.32 (as of a few minutes ago)....the markets seem pretty convinced that the they can/will survive now and see the planes get to market.

What has yet to be seen is whether this new assurance level is felt by airlines and they place orders (as they would have had similar concerns about buying a plane that might never be delivered).
 
Tulse said:
So if the business case is so solid, why can't they get financing from the market? Why does the public purse have to bail them out?
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Launch delays. If they had delivered on time, they wouldn't need a cent. It was a good business case, but one that left little room for error. The delays here are no different at all than Boeing on the 787 or Airbus on the A380. The difference is that those companies are better capitalized and backed by governments that consider their industrial capacity essential to national security (so will not let them fail).
 
kEiThZ said:
Launch delays. If they had delivered on time, they wouldn't need a cent.
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There's no incentive to avoid delays if you know you can demand the Quebec, and now national taxpayers to back you up.

I want Bombardier to be successful, same as other Canadian-owned firms are successful. Outside of the banks, Canada's biggest firms are based on resources and transportation. Certainly many of these turn to government for help when needed, but no to my memory has been as guilty as Bombardier.

https://en.wikipedia.org/wiki/List_of_largest_public_companies_in_Canada_by_profit

If Bombardier is worth a bailout, why not one for Suncor, Potash Corp, Husky Energy or Canadian Oil Sands?
 
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Admiral Beez said:
If Bombardier is worth a bailout, why not one for Suncor, Potash Corp, Husky Energy or Canadian Oil Sands?
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To be fair, it's hard to argue for a bailout- beyond support for those who are unemployed - when your industry basically involves nothing but digging stuff up from the ground and turning it into fuel, whereas it will be tremendously difficult to rebuild an aerospace industry and the ancillary knowledge jobs once it's gone.

Having said that, any bailout really shouldn't be done on the terms of BBD. They should just nationalize the sucker, kick the founding family out and sell it.

AoD
 
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