Bombardier cuts production of CRJ

Bombardier announced on September 20th, 2011 that it will be reducing production of its CRJ aircraft series due to slowing demand.

Reports are that the reduced pace of orders has made a review of Bombardier’s production plans necessary and the production cut is seen as being mandatory for the company. Bombardier also indicated that no lay-offs were planned because affected employees were being transferred to other projects.

Bombardier had delivered a total of 1,647 CRJs by the end of July 2011, but the program backlog was 61 orders. Bombardier expects to deliver 90 CRJs this year, and would provide an estimate of 2012 deliveries after the current fiscal year, ending January 31.

The company is also scrambling to win orders for its new C-Series aircraft, which will expand its line-up into the 100-149 seat market and bring it into direct competition for the first time with Boeing and Airbus.

Bombardier claims that the new aircraft will lower fuel costs by 20 per cent and cash operating costs by 15 per cent.

The C-Series is due to make its maiden flight next year, with first deliveries planned for 2013. Bombardier has so far taken 133 orders but many customers appear to be leaning towards new offerings from Airbus and Boeing.

Airbus has won hundreds of orders for an upgraded version of its A320 family of aircraft, announced late last year, which features more fuel-efficient engines.

To meet this threat, Boeing decided last month to upgrade its popular 737 aircraft with a new engine for the fast growing narrow-body jet market.

Bombardier shares were little changed at C$4.23 at midday in Toronto on Tuesday.

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