Bombardier takes commercial aircraft slump in hand

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Bombardier Inc has taken steps to address this year’s slump in orders for its regional jets, putting it on a stronger footing to deal with a still tough sales environment, said the head of its aerospace unit.

Bombardier recently announced cuts to both its CRJ regional plane production and its Q400 turboprop output as order books thin and competitors Brazil’s Embraer and French turboprop manufacturer ATR continue to win customers.
“It is a concern of mine. We haven’t done well this year,” Bombardier Aerospace President and Chief Operating Officer Guy Hachey said at an investor day conference in New York, Reuters reports.

Hachey said three main factors were behind Bombardier’s poor order performance: its lower penetration into emerging markets, which are growing at a faster pace than the company’s traditional markets in the United States and Europe; a dearth of leasing options for customers; and the lack of a competing aircraft to Embraer’s 100-seater plane, the Embraer 190.

The company has tried to address all three shortcomings.
“In the last nine months we have doubled our sales force in commercial aircraft… All of this has been in emerging markets,” Hachey said. “We have also dedicated resources to developing lessors and operating leases… We now have operating leases that we can offer with our products in those regions where people are maybe not buying.”

Bombardier late last year launched the CRJ-1000, its biggest regional plane to date, to compete with the Embraer 190.
“Right now, when I look at our pipeline of opportunities for commercial aircraft… it’s in the best shape it’s been in the past six years,” Hachey said.

That said, the weaker economic environment means it remains difficult to convert negotiations and tentative agreements into firm orders as customers are “very skittish” and financing “is difficult to get”, he said.

Bombardier will update delivery guidance for commercial aircraft early next year, Hachey said.

Hachey, repeating comments made by Bombardier’s Chief Executive Pierre Beaudoin last week, said the company’s all-new C-Series jet is on track to enter into service late in 2013.

In a sector where chronic delays on developing of new-design planes are not unusual, a number of market analysts have started questioning if Bombardier can finish the project, its biggest plane yet, in two years.