After failing to establish itself in the commercial aviation market against entrenched competition from The Boeing Company and Airbus SE, Montreal-based Bombardier, Inc. is selling its regional jet program to Tokyo-based Mitsubishi Heavy Industries, Ltd. (MHI). Under the definitive agreement – signed at Le Bourget during the 53rd International Paris Air Show – MHI will acquire maintenance, support, refurbishment, marketing, and sales activities for all Canadair Regional Jet (CRJ) family of aircraft.
The acquisition will also include the related regional jet services and support network in Montréal, Québec, and Toronto, Ontario, and its service centers located in Bridgeport, West Virginia, and Tucson, Arizona, as well as all CRJ series type certificates. This will undoubtedly bolster MHI's existing commercial aircraft business, in particular the development, production, sales and support of the Mitsubishi SpaceJet (formerly the Mitsubishi Regional Jet) commercial aircraft family, especially regarding the company’s strategic growth plan for critical customer support functions.
“As we outlined during the recent Paris Air Show, we are working hard to ensure that we provide new profit potential for airlines and set a new standard for passenger experience,” says MHI president and CEO, Seiji Izumisawa. “This transaction represents one of the most important steps in our strategic journey to build a strong, global aviation capability. It augments these efforts by securing a world-class and complementary set of aviation-related functions including maintenance, repair, and overhaul (MRO), engineering and customer support.”
“The CRJ program has been supported by tremendously talented individuals. In combination with our existing infrastructure and resources in Japan, Canada and elsewhere, we are confident that this represents one effective strategy that will contribute to the future success of the Mitsubishi SpaceJet family,” continues Izumisawa. “MHI has a decades-long history in Canada, and I hope this transaction will result in the expansion of our presence in the country, and will represent a significant step in our growth strategy.”
MHI will pay $550 million to Bombardier and assume approximately $200 million in liabilities from the Canadian company. Bombardier's net beneficial interest in the Regional Aircraft Securitization Program (RASPRO), which is valued at approximately $180 million, will be transferred to MHI.
Bombardier will hold onto the CRJ production facility in Mirabel, Québec, wrapping up production of current and on-order aircraft and supplying components and spare parts on behalf of MHI. CRJ production is expected to conclude in the second half of 2020 – the MHI acquisition is set to conclude before that in the first half of 2020 – after which, Bombardier will continue to focus on its business jet and rail transportation business.
“We are very pleased to announce this agreement, which represents the completion of Bombardier's aerospace transformation,” says Alain Bellemare, president and CEO of Bombardier. “We are confident that MHI's acquisition of the program is the best solution for airline customers, employees. and shareholders. With our aerospace transformation now behind us, we have a clear path forward and a powerful vision for the future. Our focus is on two strong growth pillars: Bombardier Transportation, our global rail business, and Bombardier Aviation, a world-class business jet franchise with market-defining products and an unmatched customer experience.”
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William Kucinski is content editor at SAE International, Aerospace Products Group in Warrendale, Pa. Previously, he worked as a writer at the NASA Safety Center in Cleveland, Ohio and was responsible for writing the agency’s System Failure Case Studies. His interests include literally anything that has to do with space, past and present military aircraft, and propulsion technology.
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