Canadian manufacturer Bombardier has seen better days than where it finds itself now. Here, in 2020, the company’s aerospace division is a shell of what it once was – having divested itself of the Dash 8 turboprop, CRJ Regional Jet, and CSeries (A220) programs all within the last two and a half years. How did we get here?
A story beginning in the 1980s
After two decades of modest success with its rail-transportation business, Bombardier decided to enter the aerospace sector in 1986. It was in this year that it purchased Canadair – the manufacturer of the Challenger widebody business jets and the CL-215 amphibious firefighting aircraft.
In 1989, Bombardier launched the 50-seat Canadair Regional Jet (CRJ) program, which made its first flight in 1991 and was awarded Canadian type certification in 1992. These regional jets would be staples of short-distance, regional travel across North America – filling the fleets of regional affiliate airlines that served the big three US carriers as well as Air Canada
The ‘roaring 90s’
The 1990s saw Bombardier’s regional jet program flourish. With the company’s aerospace division gaining momentum, it sought to expand further by purchasing the de Havilland division of Boeing in 1992. This division, based in Canada, would see Bombardier manufacture the ever-popular Dash 8 series regional turboprop. It is the early-mid 90s that Bombardier claims to have become “a leader in the growing market niche of regional airlines and the only one to offer both jet and turboprop aircraft in the 50-seat category.”
With the CRJ program becoming firmly established through the early 90s, we would eventually see the development of the 70-seat CRJ700 (1997).
Aside from commercial aircraft, Bombardier was also continuing to develop its private jet business. In 1990 it acquired Learjet, giving the company a strong presence in the United States. The company would go on to launch a third business jet program – Global Express. If you’re keeping track, this would give Bombardier three business jet programs:
- Global Express
The 2000s and on: Flying too close to the sun?
In 2000, Bombardier would launch the 86-seat CRJ900 and the 100-seat CRJ1000 regional jet in 2007. The updates to the CRJ program would be called the next generation series and feature improved operating costs, an all-new cabin, and increased use of composite materials.
With Bombardier Aerospace’s private and regional aircraft divisions continuing to expand, Bombardier would then launch the C Series program in 2008. This aircraft would be a five-abreast commercial airliner family seating 110-130 passengers. The aircraft would feature next-generation technologies and cutting-edge fuel-efficiency. It’s planned entry into service was to be 2013.
“Nobody at Bombardier was naïve about the challenge…They tried to mitigate every risk that they saw, but even with all that, it was still a bigger challenge than they could deal with.” -Gary Scott, Commercial Aircraft Division leader, Bombardier via Financial Post
At the 2008 Farnborough air show, we would see Lufthansa Group sign a letter of interest (LOI) for up to 60 aircraft, including 30 options. These would eventually be directed towards SWISS. However, aside from Lufthansa’s order, there was far less demand than the manufacturer was anticipating.
Unfortunately, development delays, cost overruns, and a 2014 engine failure (just before the upcoming Farnborough air show) all seriously hampered Bombardier’s ability to sell the aircraft.
In retrospect, some say that the aircraft was a great product that lacked sufficient marketing to secure the sales needed.
From bad to worse
It was initially a moment of relief and reward for Bombardier – Delta Air Lines would order 75 CS100 jets with another 50 options. However, this one sale would draw some unwanted attention from US manufacturer Boeing, which filed a petition for dumping.
Boeing was of the mindset that the aircraft threatened US industry, while Bombardier argued that there was no such aircraft being manufactured in the US that filled the role that the CSeries was aiming for. The Boeing 737 was the closest product but was a much larger aircraft.
On 26 September 2017, the US Department of Commerce (DoC) would impose tariffs of 220% and add a preliminary 80% anti-dumping duty, resulting in a total duty of 300%. The DoC announced its final ruling a few months later, settling on 292%. This, of course, would have ruined the crucial deal Bombardier had with Delta – which it saw as an opportunity to gain a foothold in the lucrative US marketplace.
While the US International Trade Commission would go on to rule in Bombardier’s favor a few months later, the prolonged legal battle didn’t help with orders of the new jet.
With few sales coming in and money being spent on this legal battle, Bombardier’s vulnerable position led Airbus to throw the Canadian company a lifeline, taking a controlling stake in the CSeries program and give it a boost with more robust marketing and manufacturing power. This would take place in July 2018.
The beginning of the end
With the CSeries under Airbus control, the program, now called the A220, would see elevated levels of success. So much so that additional funds were needed to ramp up production- funds that Bombardier didn’t have at its disposal. As a result, Bombardier would sell its remaining stake in the program to Airbus at the start of 2020.
In late 2018, Bombardier would divest itself of another commercial aircraft program: The Dash 8 Q400. “I just kept talking to them and saying, ‘If you’re ever in a position to sell the whole program, we would be very interested,'” recounts Dave Curtis of Viking Air to BC Business. Viking Air and Longview Aviation Capital Corporation would take full control of this program from Bombardier.
Then, in June 2019, less than a year later, Bombardier announced the sale of its Canadair Regional Jet Program (CRJ) to Mitsubishi Heavy Industries. This would see the Japanese company take control of “the maintenance, support, refurbishment, marketing, and sales activities” of CRJ aircraft.
Now, in the middle of 2020, Bombardier’s Aerospace division is left with its three lines of private/business jets. Even still, this past February, there was news that Bombardier was looking to sell this division to US manufacturer Textron. The pandemic has likely postponed or scuttled this deal.
Where did it go wrong?
There are many contributing factors to Bombardier Aerospace’s fall from glory. Like most things in life, it’s not straightforward and likely a combination of many forces. Here are just a few:
- Huge debts were taken on from CSeries development
- An ugly trade dispute with Boeing, and the US Department of Commerce over the CSeries
- A CSeries pause in development, leading to more intense competition from Embraer
- Dwindling sales of the CRJ program due to Embraer Regional Jet popularity
- An unfruitful yet costly LearJet 85 program
Whereas larger manufacturers have the resources and product diversification to weather some of these storms, Bombardier was just not able to ride out some of the rough patches.
Do you think Bombardier Aerospace’s downfall was a result of one specific factor? Let us know in the comments.