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Bombardier Revives CRJ Regional Jet Lineup as C Series Takes Center Stage

Strategic Insights

— 2 min read

Hugues Lessard, vice-president of Bombardier's CRJ program, and Jean-Francois Tessier, director of CRJ program strategy, are enthusiastic about the prospects of Bombardier's Canadair regional jets, despite the market's attention shifting to the company's C Series. Bombardier plans to continue producing the CRJ aircraft family for at least another decade and is investing an undisclosed amount of money to improve the planes. This move has raised concerns among investors and analysts, who worry that the company is diverting resources away from more promising projects.

Key Takeaways:

  • Bombardier will continue producing the CRJ aircraft family for at least another decade, a commitment that has some investors and analysts worried.
  • The company is investing an undisclosed amount of money to improve the CRJ planes, including modifications to the aircraft's wings and improvements to aerodynamics.
  • The current CRJ900 model offers a 5.5-percent improved fuel burn over the initial units delivered in 2003, and Bombardier thinks it can wring another 4.5 percent worth by 2020.
  • The market for regional airplanes seating 60 to 99 passengers is estimated to be 5,600 aircraft worth $185-billion over the next 20 years, with Bombardier aiming to win half of all new orders.
  • Executives argue every CRJ jet version delivers a 5- to 15-percent operating cost advantage over competing jets simply because they're lighter and burn less fuel.
  • Replacing the existing General Electric engines on the plane with new ones might deliver even better operating numbers, but Bombardier seems to be in no rush to make the change.
  • A renewed focus on the CRJ could help the plane survive in the marketplace, as there is a niche for the light and cheap regional jet.

Statistics:

  • Estimated market size for regional airplanes seating 60 to 99 passengers: 5,600 aircraft worth $185-billion over the next 20 years.
  • Number of CRJ orders since the planes first flew in 1991: over 1,800.
  • Projected development cost of the C Series: $5.4-billion.
  • Current cash and available credit at Bombardier: $6.2-billion.
  • Fuel burn improvement of the current CRJ900 model over the initial units delivered in 2003: 5.5%.
  • Potential fuel burn improvement of the CRJ by 2020: 9% (5.5% + 4.5%).
  • Savings per year for an airline due to the conic-shaped exhaust nozzles installed on the CRJ900 NextGen aircraft: $50,000 per plane.

Sources:

  • "Bombardier Executives Tout CRJ's Prospects as C Series Takes Center Stage" by Nicolas Van Praet, originally published in The Globe and Mail.

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