CRJ700 Bombardier

Fitting the CRJ Into A Restructured Bombardier

Bombardier plans to sell its aerostructures facilities in Belfast and Morocco, but what's not clear is what happens to the CRJ and its aftermarket potential.

Bombardier’s decision to sell its aerostructures facilities in Belfast and Morocco is part of the company’s move out of commercial aviation to focus on its business jet lines and rail arm.

The divestitures will follow the Canadian manufacturer’s sale of a controlling stake in the CSeries (now A220) business to Airbus and the sale of its Q400 and other turboprop lines to private equity firm Longview Aviation Capital.

“Clearly, this is a strategic move,” said Bombardier president Alain Bellemare on first-quarter earnings call, adding: “We want to zoom in on the businesses that are going to create the most value for our shareholder: business aircraft and rail.”

What isn’t clear, though, is where the CRJ line fits into this new strategy. The CRJ has been bundled into Bombardier Aviation with the company’s business jets, but Bellemare said as recently as April that the CRJ’s puny backlog needed beefing up if the product line was to continue.

Strategic options for the program are still being explored. In February, the company launched the 50-seat CRJ550, but there has also been speculation that Mitsubishi Aircraft, among other potential buyers, might bid for the CRJ.

Mitsubishi Heavy Industries was already a supplier for the rear section of the CRJ700, but unlike in the Longview-Q400 deal, its parent has no experience supporting the aircraft family. Longview subsidiary Viking Air supported the Q-series turboprop line with maintenance and parts.

Furthermore, Bombardier may wish to keep the CRJ to supplement its growing aftermarket business. Its business aircraft aftermarket revenues grew 20% in the first quarter and it also reported “strong aftermarket performance” in its commercial segment.

Given that there almost 1,500 CRJ aircraft still in service, the maintenance and support market for that regional jet might be too attractive for Bombardier to relinquish.

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