Canadian aerospace firm Bombardier Inc is effectively exiting the commercial airline manufacturing sector with the sale of its CRJ Series regional jet program.
Announced on Tuesday, the deal would transfer the program to Mitsubishi Heavy Industries Ltd, which has been seeking to break into aviation, for US$550 million.
Bombardier has also sold its new medium-range C Series jetliners to Airbus SE, which renamed the line A220, and its Q Series turboprop line to a Canadian investment fund.
Photo: AP / Ryan Remiorz / The Canadian Press
The sale of the 75 to 100-seat CRJ line — along with its service and support networks in Montreal, Quebec City and Toronto, as well as Bridgeport, West Virginia, and Tucson, Arizona — is expected to close in the first half of next year, subject to regulatory approvals.
In a statement, Bombardier said that Mitsubishi would also assume liabilities totaling US$200 million, and take over all maintenance, support, refurbishment, marketing and sales activities for the aircraft.
Mitsubishi president Seiji Izumisawa said that the CRJ program would complement the development and production of its SpaceJet family of commercial jets as the company aims to grow its aviation business.
Formerly known as the Mitsubishi Regional Jet (MRJ), the SpaceJet regional aircraft’s development has suffered several years of delays and the company is still seeking certification to fly the airplane before its first deliveries scheduled for late next year.
First announced more than a decade ago, the MRJ was to be the first commercial passenger aircraft in nearly half a century — and the first jet airplane — to be developed in Japan.
“This transaction [with Bombardier] represents one of the most important steps in our strategic journey to build a strong, global aviation capability” and a “significant step in our growth strategy,” Izumisawa said.
Meanwhile, the sale of Bombardier’s money-losing CRJ line marks the end of an era for the company and for Canada after a three-decade expansion into the aviation sector that began when Bombardier bought Canadair Ltd from the Canadian government in 1986.
More than 1,900 CRJ aircraft have been sold or ordered since then, but CRJ sales have slowed to a trickle in the past few years, with only a handful of new orders, and the line was arguably neglected as Bombardier poured resources into the development of the larger C Series jetliner to go head-to-head against giants Airbus and Boeing Co.
Bombardier president and CEO Alain Bellemare said that the transaction represents “the completion of Bombardier’s aerospace transformation.”
The Canadian company would now focus on its global rail business and its last remaining niche aircraft — business jets under the Learjet, Challenger and Global brands, he said.
Its CRJ production facility in Mirabel, Quebec, is to remain with Bombardier, and the Canadian company would continue to supply components and spare parts for the CRJ, as well as assemble them on behalf of Mitsubishi until a CRJ backlog is cleared in the second half of next year.
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