PAUL LEWIS / WASHINGTON DC
The turboprop family has no new orders and insufficient backlog to maintain production beyond early 2003
Bombardier's decision to suspend production of the Dash 8 Q Series has served to throw further doubt on the turboprop family's future, which in the absence of any immediate new orders, does not have sufficient remaining backlog to support production at the current rate beyond early next year.
The company says it still intends to deliver this year's total of 36 Q Series aircraft by the time the planned six-eight week production suspension starts in November.
According to Bombardier figures, it had this year delivered 16 Dash 8s by the end of August and the combined order backlog had shrunk to 27 aircraft, including 10 Q400s. Most recent deliveries have been one to Widerøe and the first of five Q400s to Japan Air Commuter. Air Nippon, Air Nostrum and Tyrolean also have outstanding orders.
Bombardier director programme strategy Barry MacKinnon says that after the shutdown the company will have seven Dash 8s on backlog. "So we need to get more orders, right? There are a number of serious prospects in the Americas, Asia-Pacific and Europe...at a very advanced stage of discussion," says MacKinnon.
Chief executive Robert Brown says he "refuses to provide any delivery guidance for next year". Bombardier is "fully committed to the Q400, there is no question...we anticipate further orders".
The company adds that stopping the Q series line is an unavoidable consequence of suspending Global Express production and union "bumping rights" which determines worker layoffs based on seniority. "We would have preferred not to stop the Q400, but that would have caused disruption," says Brown.
Financial analysts, however, remain unconvinced that Dash 8 production will resume, particularly after having written down C$264 million ($167 million) in Q400 non-recurring costs during fiscal year 2002 with another estimated C$200 million excess production costs still to follow.
A Montreal-based analyst is concerned that Bombardier has been building derivatives of old models and is in no position to pursue new models because funding is limited. Cameron Doerksen, Dlouhy Merchant analyst, says: "Historically, they've been profitable, especially on the business jet side. This seems to be changing.
"They're hoping to convert some of their [85] options into firm orders. If they don't, they could shut down the assembly line for more than two months."
Additional reporting by Brian Dunn and Christina Mackenzie
Source: Flight International
