AIRBUS Planning for Mirabel CSeries - Where are the Q400 and CRJ Going... The Global 7000 is Moving Too
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UNLOCK TO ALL on May 3 2018 - For NEWSLETTER SUBSCIBERS ONLY
13:10 (17:10 UTC) - May 1, 2018 - Québec, Canada
UPDATED May 1, 2018 - 20:30 (00:30 UTC)
By Sylvain Faust
- Q400 New Owner
- Global 7000 New Assembly Location, after Downsview. (UPDATED)
- Airbus Plan for Mirabel CSeries
- CRJ Looking for a New Home
- CSeries Production – Where is Delta First and Second CSeries?
With Bombardier aerospace corporate strategy to get out of directly selling commercial aircraft, to focus on the much more profitable Business Aircraft division instead added to being a supplier of engineering services and parts manufacturer, the only 2 aircraft family that remain to be sold (CSeries is done!) are the Q400 turboprop and the CRJ regional jet.
The Q400 is assembled at Bombardier Downsview airport facility in Toronto with all its parts manufactured in China except for its wing and cockpit (Downsview) did found a very interested client few months ago, I reported it, from China. (More on this below).
The CRJ is assembled at the Airbus CSeries (A200) facility at Mirabel-Montreal airport.Its cockpit is made by Bombardier in Montreal/Ville St-Laurent. (More on this below)
The Q400 Next Owner
Since I wrote that Bombardier found a buyer in China for its Q400, I have also reported soon after that someone in Ottawa did not like the idea. Same people who did not like the idea that Bombardier tries to enter into a partnership with China for its CSeries and told its management in Montreal to call back Airbus instead. (What else was Ottawa dealing with Airbus to act as an intermediary for them? Military contracts? The purchase of the new Search and Rescue Airbus C-295 replacing the current Buffalo CC-115 when Viking Air was offering its updated version, or was it about the replacement of the CF-18 with Airbus/Eurofighter?)
I was told a few months ago that Bombardier offered the Q400 to another "Canadian" aircraft manufacturer. Again, recently, I'm told the same thing from different sources. Who is it you asked? The same company who bought all de Havilland Canada designs from Bombardier 12 years ago, to the exception of just one, the DHC8, also known as the Q400. It is Viking Air of Victoria, British Columbia, Canada
I'm also told that Viking Air is only "one of them". I don't think the "others" are in Canada!
Could this be true?
I remember when I suggested Bombardier's management 3 years ago to let the CL-215/CL-415 amphibious water bombers go to Viking Air when made aware of its low production (sales) thinking of a place where it could be taken care instead of killing the program! As you know, Viking Air bought it in June 2016 taking over the responsibility for providing support, parts and servicing for the aircraft, with much of the work conducted at its Calgary, Alberta facilities.
Viking Air currently own the following de Havilland aircraft type certificates (all aircraft rights):
What's missing? The DHC8 Q400
My first question is how would Viking Air finance this new purchase? I would assume that Longview Aviation Capital (managing Viking Air) would probably find some interesting help from the government of British Columbia and also Alberta added to the Canadian Federal government in Ottawa.
Bombardier would probably be also offering some interesting financing terms to help with the transaction. We could assume that the final assembly of the Viking Air Q400 could be done at their Alberta facility but Ontario government could also be competing hard to keep it in the province and for Viking Air to retain the Q400 key workers Hamilton airport seems to be one of the options.
It would also give Viking Air an interesting relationship with Chinese parts manufacturer.
Bottom line for the Ottawa guys, it would remain in Canada. I have no doubt that the Q400 would be greatly taken care of at Viking Air.
What a perfect timing (if you think all this is happening "by chance") for Bombardier when the company is about to sell their Downsview property later this year. Selling the land at Downsview should provide $1 billion or almost to Bombardier helping with their $11 billion debt.
Did I say "Perfect Timing"? Say it twice… What will happen on June 22? The Q400 labor contract will be over and up for negotiation. Ah!
How much could Bombardier fetch for the Q400 program? Good question… more on this later, but the bigger the Q400 sales, the backlog, the higher the value! To make money you better be selling this before you let it die. When I sold my business I focused really hard in the months ahead to increase its sales, among other things… you now know why!
Global 7000 New Assembly Location, after Downsview.
According to sources, Bombardier would be planning to be moving the Global 7000 assembly line from its current location at Downsview airport to a facility at Toronto Pearson Airport YYZ/CYYX in 2 years in relation to the Downsview real estate own by Bombardier being sold by year end 2018.
One important thing to mention, still according to the same sources, the Q400 assembly facility is not included in such a moving plant. That is adding value to the information about the Q400 being sold to another manufacturer soon.
Airbus Plan for Mirabel CSeries
I was pleased when told about what Airbus has in mind for its newly acquired CSeries facility at Mirabel airport if it is accurate.
Many times on Fliegerfaust.com you read different articles mentioning the fact that Bombardier did not complete the construction of the CSeries assembly buildings as originally planned.(Just click the top left "hamburger/bars menu" if mobile or directly click from the left section on "Normand's Run-Up Pad" and read his "many" articles for more on this).
According to what I've learned, Airbus would be completing/expanding the CSeries assembly line as it was originally supposed to be! That is good news! Airbus is planning to make Mirabel the "Main" CSeries assembly facility helped with a new assembly facility in Mobile, Alabama to serve only the US customers I'm told and as Bombardier and Airbus announced earlier.
The transaction with Airbus is not completed yet.
The CSeries $0 "deal" will be closed (all signed up!) with Airbus before the end of May as I announced on Fliegerfaust on March 28. Starting on the date of the closing Bombardier Inc. will still be paying the first $1 billion (US$700K) modulated over the first 3 years of any lost generated by the CSeries.
So, you know who would be paying for Airbus's decision to build/complete the new CSeries assembly line in Mirabel, among other things, this includes the Mobile, Alabama new assembly facility, Bombardier Inc.
Quebec Government will also be paying since that additional $1 billion spent/injected by Bombardier into the CSeries will increase the dilution of the part own by Quebec, increasing the shares owned by Bombardier Inc. in the CSeries (Read all about it here: English Français)
Good news it is for the workers at/around Mirabel and Montreal related to the CSeries. Expect for all the details about this to be released by the new Boss at the closing of the deal. We will also know if the CSeries is renamed A200 and its associated models, the CS100 and CS300 to be renamed A210 and A230 by Airbus.
CRJ Looking for a New Home
As part of the $0 "deal" (+ another $ 1 billion paid by Bombardier on future lost) with Airbus for the CSeries, the complete facility at Mirabel airport next to the highway 50 will be owned by the new CSeries program, i.e. under the control of it majority shareholder, Airbus. As you might already know It will be named Mirabel Airbus (A200 or CSeries) Facility.
The CRJ aircraft is assembled inside that facility. For the short term, as soon as the deal is closed with Airbus, Bombardier will be "renting" the space it current uses for the assembly and completion of its CRJ aircraft (CRJ700, CRJ900, CRJ1000), but not for long.
Airbus wants all the space to be dedicated to the CSeries/A200 aircraft assembly and completion, no more sharing with the CRJ. Remember, this facility was built original for the CRJ alone in 2000/2001. I do not have the amount spent by the government to help Bombardier built this factory, now an Airbus factory, for how much again? (Reference: http://www.tvanouvelles.ca/2000/08/11/bombardier-investit-170-millions--a-mirabel)
The CRJ will have to find a new home soon. But where? Bombardier facility at Montreal-Trudeau airport? It is already very busy with the production of the Challenger and the interior completion of the Global 6000 and Global 7000 (Global 5000 interior completion to be moved to Wichita, already announced). Could it take the assembly of the CRJ as well? I think so. Is the square foot cheaper at Montreal-Trudeau YUL airport vs Mirabel YMX airport? Mirabel airport as plenty of available space, next to two runways of 11000 feet each, just few minutes North West of Montreal, closer to area people prefer to live compared to the traffic heavy, tight space lodging and expensive city of Montreal.
Could Bombardier find a buyer for the CRJ program before?
CSeries Production – Where is Delta First and Second CSeries?
First, as you read on Fliegerfaust, Bombardier decided to stop the planning of moving some of the Mirabel produced CSeries to Wichita for its interior completion. Airbus basically said "please, don't change anything until we're in charge". We'll see what happened when they are "in charge".
Talking about Wichita, all CSeries flight test vehicle (FTV) are now located across town, to the east, using space Bombardier is leasing at McConnell Air Force Base (AFB).
Currently two of those can be seen outdoor while the others are stored inside. What will be happening of those CSeries aircraft after Airbus takes control? This represents 8 CSeries aircraft. FTV1-5 (CS100), FTV7-8 (CS300) and P1 (CS100) (production #1 MSN 50006). Stay tuned for more on this.
Today was the first CSeries of May leaving the Mirabel facility. One CSeries in April left Mirabel, another SWISS CS300. Today it was SWISS CS300 MSN 55027 leaving at 5:40am this morning for Zurich. It did its first pre-delivery flight test on March 17, 6 weeks ago.
It is interesting to note that this delivery is 2 weeks late from the mid-March schedule where a mid-April delivery date was planned. More delays. Let see how quickly SWISS can take the following CSeries. The next CSeries delivery "should be" around mid-May, MSN 55029, another SWISS CS300.
Delta first CSeries has its wings and landing gears installed! MSN 50020 is next to the exit door at the fuselage assembly building (the new building). It is scheduled for delivery in October. The 2nd Delta CSeries MSN 50021 will be moving forward to get its wings and landing gears very soon. Good news!
New CSeries Clients?
JetBlue is waiting for the deal with Airbus to close to receive directly from Airbus, the then new boss, the offer with a "new pricing".
I'm also told that another US airline with many A319 has asked Airbus to be prepared on day one to make them an offer.
Remember that Airbus has negotiated with the CSeries suppliers much lower pricing allowing to drop the aircraft construction cost. Like I did mentioned before, just for the APU Honeywell dropped its price by 30% from what Bombardier was paying. For sure, Airbus does purchase many more units from Honeywell than Bombardier ever did. Same thing is going on with UTC owner of both Rockwell Collins (supplier of the flight control systems) and Pratt & Whitney USA (supplier of the aircraft engine). Remember, once again, the CSeries engine assembled in Mirabel, Quebec is a product managed by Pratt & Whitney USA, not Canada.
This should get the aircraft unit price much lower allowing for better pricing and potentially one day, a profit.
Will Bombardier also have to drop its price for its cockpit and wings? Good question. The wings for the CSeries are made by Bombardier at their Belfast, Northern Ireland factory. The aircraft cockpit is made by Bombardier in Montreal/Ville St-Laurent.
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Sylvain Faust, Fliegerfaust