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ABSTRACT: UPDATE – Bombardier plans first flight of the $72 million, 135 seat CS300 any day now, the future of Commercial Aircraft Division rides on this model, which today has 74% of the CSeries 243 meager orders, the company has just sold 424.4 million newly issued shares (TSX:BBD.B) at $C 2.21 per share (10% discount) and raised $C 938 million in equity with another $C 1.2+ billion in debt financing needed in 1H/2015 to raise liquidity, as cost of the CSeries program is now $5.4 billion (up by $2.0 billion), the Government of Quebec is prepared to “bail out” Bombardier Inc. if it needs it, for now it does not need it, the company is “too big to fail” ? 2015 is a BIG year for the company, get CS100 certification, and new orders will come, which will drive confidence and stock price upwards, miss the planned 2015 certification and the stock will plummet, already confidence among investors, customers, prospects and employees is very low, new President/CEO Alain Bellemare has the potential to turn it all around, but cannot due it alone, needs good people to implement the changes needed, any good executives left ? the problem is not the products but the poor leadership and bad corporate culture that has been allowed to permeate throughout the company under the previous CEO.

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As it looks now, the Bombardier CS300 is set for its 1st flight tomorrow, Thursday, February 26th, as it now has the approval from Transport Canada to test fly the aircraft. The Bombardier CS300 is in the 135 to 160 market, so it will compete with the Airbus A319neo and Boeing B737-Max7, a tough duo … Continue reading →

ABSTRACT: Bombardier has gone outside the company and family for its new President/CEO, Mr. Alain Bellemare from UTC, his main task has to be the radical turnaround of the $10.49 B a year Aerospace Division, as the $US 3.4 B CSeries program is now $US 5.4 B ! and EIS is NOT until 2016, in 2014 Aerospace lost $995 M, free cash flow was a $ -1.059 B, Commercial Aircraft’s CRJ and Q400 sales slowly fading even with +30% discounts (only 27% of revenue) while business jet orders are down 59% in 2014 from 2013 with a disappointing Order to Bill Ratio of only 0.6 (sold less than it delivered), Business Aircraft has always been strong (72% of revenue) now facing new competing aircraft programs that are going to challenge it’s sacred high margin ‘Cash Cow’ Global brand ($4.5 B in sales on 80 delivered and 43% of total revenue), off course more liquidity is needed to finish the CSeries and Global 7000/8000’s, so $US 2.1 B in new in debt and equity will be raised, while the struggling CSeries order book of 243 units now needs at least 550 orders to break-even, it is time to fix Bombardier Aerospace from the top down and possibly JV with China’s Comac (aka “Combardier”)

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Following up my blog article on Bombardier Aerospace on January 20th, where I dared to ask the question if it was time for Bombardier to look outside Bombardier and the family for a new CEO, like they did back in 2002, the answer came Feb 11th, when Mr. Alain Bellemare was hired as the new … Continue reading →

ABSTRACT: Canada Jetline and Jet Naked are racing to be Canada’s first ULCC (ultra low cost carrier), both looking to start this summer but funding the initial $50 million start up costs is dragging on, yet Canada Jetline orders 5 x B737-Max7’s and purchase rights on 16 more but delivery is not till 2021 and start up will be with old B737-300’s, can one of them do the same that Westjet Airlines did 19 years ago when it WAS a low fare airline with 3 x B737-200’s ? and when Air Canada failed to crush it early on with its failed LCC ZIP, presently Air Canada is busy with its low cost but not low fare subsidiary Rouge, while Westjet is building up its regional network with Encore and its wide-body fleet with B767-300’s (???) for flights to Europe and Hawaii, current distractions at AC and WJ are good for the ULCC hopefuls, Canada needs a LCC as we live in the ONLY major country in the world without a locally based LCC we can turn to for low fares as the duopoly here (AC and WJ have yields of +/- 19 cents/RPM) and have NO incentive to lower theirs, it is why +4.9 million Canadians drive to US border airports to fly on US carriers every year !

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Canada’s new ULLC (ultra low cost carrier), I prefer to use the term low fare airline (LFA), but anyway Canada Jetlines Ltd has signed an agreement with Boeing for 5 new B737-Max7 airliners for delivery in 2021, and has purchase rights for 16 more, while it is in the midst of raising $ C 50 … Continue reading →

ABSTRACT: IAG (International Airline Group) acquires Ireland’s Aer Lingus and gains 23 valuable slots at Heathrow, while oneworld partner Qatar Airways buys 10% of IAG, Europe’s highly fragmented airline industry with 200+ airline groups where the top 5 airlines by traffic have a 46% market share compared to 87% in the highly consolidated and concentrated US market, and a new stage of European consolidations will soon begin, as state aid is all but gone now, and already in 2015 both Cyprus Airways and EuroLOT are shut down, Lufthansa Group and Air France-KLM Group both struggle with sustainable profitability and many of the remaining small carriers are waiting for a “white knight” before they go bankrupt, meanwhile most of the recent European airline acquisitions have been from outside of Europe, the industry is changing, and many airline bankruptcies are expected as there are no more “white knights” around like Etihad Airways to rescue the weak and struggling airlines.

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The Irish national carrier, Aer Lingus is being acquired by IAG (International Airline Group, LSE:IAG), the 6th largest airline group in the world with revenue of $US 24.7 B (billion) and the parent of British Airways, Spain’s Iberia and LCC Vueling, valuing the airline at Euro 1.36 billion (+/- $US 1.53 billion). Under current CEO … Continue reading →

ABSTRACT: Porter Airlines, now 8 years in operation and Canada’s 3rd largest scheduled airline has been in a state of semi-oblivion since 2011 when it received the last of its current 26 Q400’s, but the latest sale of its Passenger Terminal at Billy Bishop Toronto City Center Airport (CYTZ) for a reported C$ 750 million now gives Porter the money to move forward with its purchase of 12 plus 18 options for the Bombardier CS100’s, just needs to ‘influence’ Toronto’s City Council to allow jets into the airport and lengthen the runway by 400 meters, Bombardier desperately needs this Canadian/North American order for its struggling program, the political obstacles will surely be taken care off, so it is now very likely that Toronto’s City Council will approve of the lifting of the jet ban, agree to the runway extension and the CSeries will be in Porter’s livery one day as money always talks in politics and business, though Toronto will have another major airport right in downtown Toronto that will have to handle +4.5 million passengers ! but is the CS100 strategy the right one for Porter Airlines ? get the strategy wrong and it will bankrupt the airline in no time and can anyone ever change the airline duopoly in Canada ?

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Porter Airlines, Canada’s 3rd largest scheduled airline (though it has less than 2.5% of the C$ 13 billion a year Canadian domestic and trans-border market) was heading into its 9th year of operation in a state of oblivion, as its fleet of 26 Bombardier Q400’s (74 passenger seats) and 1,400 employees has remained constant since … Continue reading →

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