Well, it’s finally happened. What started as the hiving off of the CSeries programme to Airbus, and the disposal of the Dash series to Longview Aviation is concluded – with Bombardier to sell its CRJ (Canadair Regional Jet) to Mitsubishi Heavy Industries.
Both companies have agreed to enter into a definitive agreement, whereby Mitsubishi will acquire Bombardier’s regional jet program for a cash consideration of $550 million USD, payable to Bombardier upon closing, and the assumption by Mitsubishi Heavy Industries of liabilities amounting to approximately $200 million USD.
Mitsubishi will get from the purchase the maintenance, support, refurbishment, marketing, and sales activities for the CRJ Series aircraft, including the related services and support network located in Montréal, Québec, and Toronto, Ontario, and its service centres located in Bridgeport, West Virginia, and Tucson, Arizona, as well as the all-important type certificates.
For Mitsubishi, it adds to their portfolio as it moves forward with the development, production and sales of the SpaceJet aircraft family – as well as the all-important maintenance and engineering capabilities of the CRJ program.
The CRJ production facility in Mirabel, Québec will remain with Bombardier. Bombardier will continue to supply components and spare parts and will assemble the current CRJ backlog on behalf of MHI. CRJ production is expected to conclude in the second half of 2020, following the delivery of the current backlog of aircraft.
The transaction is currently expected to close during the first half of 2020 and remains subject to regulatory approvals and customary closing conditions.
Seiji Izumisawa, President & CEO of Mitsubishi Heavy Industries Ltd., commented:
“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. 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. 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.”
Alain Bellemare, President and Chief Executive Officer, Bombardier Inc stated:
“We are very pleased to announce this agreement, which represents the completion of Bombardier’s aerospace transformation. 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.”
With this move, Bombardier will complete its exit from commercial aerospace operations, leaving it with its transportation, business jet and aero-structures. There are implications for the workforces as well, with reports that the Northern Ireland manufacturing is up for sale, and its future uncertain.
For Mitsubishi, they will gain the knowledge of a supply chain, a customer market for their upcoming SpaceJet, as well as one less competitor in the regional jet market.
Whilst the move to the market seems to be up-scaling to larger aircraft – there is still room it seems for the sub-76 seat plane and the sub-100 seat plane markets which can’t justify a narrow body aircraft.
And this will be the space Mitsubishi will find itself up against – fighting ATR, de Havilland and Embraer in the sub 76 seat space, and Airbus and Embraer in the larger sub-100 seat segment.
Welcome to Economy Class and Beyond – Your no-nonsense guide to network news, honest reviews, with in-depth coverage, unique research as well as the humour and madness as I only know how to deliver.