Bombardier could reduce its regional aircraft production schedule as commercial demand for smaller jets remains depressed.
Speaking today during a conference call to discuss the halving of the manufacturer’s fiscal 2007 second quarter net income to $58 million, Bombardier Aerospace president and chief operating officer Pierre Beaudoin also noted the continued slump in US new aircraft demand and its effect on the airframer’s short-term future. The Canadian manufacturer reports its figures in US dollars.
“I think there is the potential to maintain the production rate that we have in place today. But, at the same time, I am saying it is likely that we will have to reduce [our] production rate,” Beaudoin told analysts and reporters. That decision to revise the current 75 regional jet annual production rate will come in the “next few months”, adds the executive.
No other details are being disclosed.
Under current production rates, Bombardier will have to build 44 regional jets in the final six months of its fiscal year to January 31 to meet it current rate target. Although this has been exceeded in the past (68 regional jets were made in the first half of 2005), this will however leave the airframer with a backlog of just 29 firm regional jets, significantly below the two- to three-year backlog currently held on the manufacturer’s business jet backlog.
This weak regional jet order book is cited for the dip in Bombardier Aerospace’s $70 million second quarter year-on-year decline in revenue to $1.89 billion and the $10 million dip in pre-tax profits to $66 million.
“This decrease mainly reflects lower manufacturing revenues mostly due to lower deliveries of CRJ family aircraft, mainly CRJ200, partially offset by increased deliveries of, and improved selling prices for business aircraft,” said Bombardier chairman and chief executive Laurent Beaudoin during today’s conference call.
In the second quarter, Bombardier Aerospace posted a $160 million increase in business class revenue and a $23 million rise in “other” sales to $103 million. At the same time, regional aircraft revenue fell 54.7%, or $267 million, to $488 million.
This dip could be temporary, according to Beaudoin. Again, declining to discuss specific details, today he repeatedly said discussions with several carriers are “advanced”, and continually noted that the USA’s carriers, the main purchasers of regional jets, are expected to launch major buying initiatives in the near future.
Source: FlightGlobal.com
