Bombardier announces sale of Q400 program, exploring options for CRJ

Nov. 8, 2018, © Leeham News: Bombardier today announced the sale of its slow-selling, aging Q400 turboprop program to Canada’s Viking Air.

  • The press release from Viking’s parent company is here.

Viking previously purchased out-of-production Bombardier/de Havilland aircraft programs, including the Twin Otter, Beaver and CL-415 firefighting bomber.

Viking Air previously purchased the Bombardier de Havilland Twin Otter program and restarted production. Now, it’s buying the slow-selling Q400 program for a mere $300m. Photo via Google images.

Twin Otter production was restarted. The Beaver was not an is not in the cards to be restarted. The CL-415 was limping along, and no longer a contributor to Bombardier’s cash flow and profits.

“The Company entered into definitive agreements for the sale of the Q Series aircraft program and de Havilland trademark to a wholly owned subsidiary of Longview Aviation Capital Corp. for approximately $300m,” Bombardier said in a press release. It also announced the sale of other assets for $800m. The two deals are expected to close in the second half of 2019.

The low price reflects the struggles the Q400 has had for years. Bombardier lost money on the Q400 in recent years.

Bombardier also said it is considering its options for the aging, struggling CRJ program.

Exploring options

“Our full attention is turning to the CRJ program. As we continue to actively participate in the regional aircraft market with our established, scope compliant aircraft, our focus is on reducing cost and increasing volumes while optimizing the aftermarket for the approximately 1,500 CRJ’s in service around the world today.  As we look to return the CRJ to profitability, we will also explore strategic options for the program,” the company said.

The CRJ has been outsold by a wide margin by Embraer’s E-Jet. It also is threatened in the next decade by the Mitsubishi MRJ70, which is Scope Clause-compliant in the US market, and the MRJ90 elsewhere in the world.

A trade secret lawsuit launched by Bombardier against Mitsubishi over the MRJ is believed to be aimed at protecting the CRJ.

Embraer, Mitsubishi and ATR are squeezing Bombardier from the latter’s turboprop to the former’s more comfortable, newer technology jets.

Consulting firm Oliver Wyman sees the MRJ out-delivering the CRJ in the next 10 years. LNC forecasts Bombardier announce an end to the CRJ program within the next five years if it isn’t sold first.

The future of the CRJ depends on US Scope Clause restrictions limiting aircraft weight to 86,000 lbs. The next round of contracts are in 2019 and 2020. No relief is expected then. Embarer, whose E175-E2 exceeds the weight limit, hopes for relief in the 2023-24 negotiations.

The MRJ70 complies with Scope. The MRJ90 exceeds the weight limit.

The E-Jets and MRJs provide better passenger experience than the CRJ, which is derived from the 1980s-design Challenger business aircraft.

Third quarter earnings

Bombardier made the Q400 and CRJ announcements in its third quarter earnings release.

“For the quarter, Bombardier’s revenues reached $3.6 billion, representing 3% organic growth year over year, from Transportation, Business Aircraft and Aerostructures, as the Company deconsolidated revenues from the C Series program following the closing of the Airbus partnership,” the company said in its press release. “For the full year, Bombardier expects revenues of approximately $16.5 billion, at the low end of its guidance range.”

With the sale of 50.01% of the CSeries program to Airbus, Bombardier recorded a number of special financial impacts. From the press release:


  • Starting July 1, 2018, following the closing of the C Series Partnership formed by Airbus (50.01%), Bombardier (33.55%) and Investissement Québec (16.44%), Commercial Aircraft deconsolidated CSALP from its results and replaced it by its share of CSALP’s net loss. As such, during the quarter, revenues decreased by $259 million mainly as the result of the deconsolidation.
  • EBIT for the quarter was near breakeven, a significant improvement as we deconsolidated CSALP results and recognized our share of CSALP’s net loss resulting in an equity pickup of $13 million. Further Bombardier invested $85 million in CSALP during the quarter in exchange for non-voting units of the partnership against its commitment of up to $225 million by year end.

Cowen & Co. was quick to issue a negative take on Bombardier’s new earnings guidance.

“Investors won’t like the big chop to cash flow guide, which raises questions re management credibility and ability to complete a successful turnaround,” the aerospace analyst wrote. He continued:

Chopped Cash Guide Disappoints Although Q3 Ops In Line.

  • Q3 was $563MM free cash outflow vs. est. $200MM
  • 2018 guide of B/E now includes $600MM Downsview proceeds; previous did not
  • 2019-2020 guides also chopped; 2019 was black ; not B/E after $500MM of one-time items. 2020 now $750-$1B vs. prior $1B
  •  Plan to sell Q400 program and bizjet training – est. combined proceeds of $900MM; major additional restructuring

“Other guide items mostly intact but investors may not care,” he concluded.

60 Comments on “Bombardier announces sale of Q400 program, exploring options for CRJ

  1. With the brand new MRJ and the already newer fuse + re-engined/re-winged E-series the CRJ is just not competitive anymore.

    I doubt they have the corporate appetite for a new start program and none of their current Bu-jet models would be suitable to just have a regional interior stuffed in.

    I would be surprised if BBD is in the commercial aircraft business at all in 3 years.

  2. Yeah, having flown Bombardier’s CRJ-900 just three weeks ago for a return flight that had me on the Embraer-175 for the outbound segment, it certainly was a vivid reminder of just how narrow and uncomfortable those 17” wide seats are even if seated in the bulkhead row, seats 5C & 5D, in Comfort+ where there’s endless legroom aboard a Delta Connection flight.

    It had been quite some time since my last CRJ flight, and yowza, had I forgotten just how nasty any 17” wide seat is as I do my level best to avoid planes with seats that narrow.

    By contrast, the Embraer 175, C+ seats are far better (except for the butt numbing that began before the plane had taxied from one end of LGA to the other for take-off, that is 😱)

    Anyhow, nope – so won’t be sorry if I never fly any CRJ again if it’s in one of those nasty, narrow, teensy weensy seats!


    (So looking forward for Delta to replace all of its NYC-RDU flights with those spiffy looking Airbus A220s instead of any regional planes – the sooner the better! 😉)

    • “So looking forward for Delta to replace all of its NYC-RDU flights with those spiffy looking Airbus A220s instead of any regional planes”

      Not so fast, Delta and American were amoung the airlines who have ordered 45 CRJ in the last 12 months.

  3. Regarding: “Viking previously purchased out-of-production Bombardier/de Havilland aircraft programs, including the Twin Otter, Beaver and CL-415 firefighting bomber.”

    Also included in Viking’s 2006 purchase of type certificates from Bombardier was that of the Q400’s Dash 7 ancestor.

    “On February 24, 2006, Viking purchased the type certificates from Bombardier for all the discontinued de Havilland Canada designs including:
    DHC-1 Chipmunk
    DHC-2 Beaver
    DHC-3 Otter
    DHC-4 Caribou
    DHC-5 Buffalo
    DHC-6 Twin Otter
    DHC-7 Dash 7

    Not included were type certificates for the DHC-8 Dash 8, which is still produced by Bombardier Aerospace as their Q400 series.”

    Regarding: “The Beaver was not an is not in the cards to be restarted.”

    However, Viking will take your tired old piston powered Beaver and convert into a like new TURBO BEAVER!

    “Converted from Piston utilizing
    original factory specifications,
    the Viking Turbo Beaver is
    essentially an all-new aircraft
    featuring a longer cabin and
    larger payload, with more
    power and better all around
    performance from the PT6A-
    27 or optional PT6A-34 engine.”

  4. This does not really surprise me, but as it happens, it is still a shocker!

    I do not really see an announcement what they will do with the Q series or what is the superb business plan behind this acquisition. Could it be that they are just better in handling the spare part business and will close the (loss making) production line in a couple of months?

    Next question for me is who will buy which business jet programmes and will the rest close down in 1 or rather 3 years from now?

    • Bombardier’s future?
      a) Develop the CRJ program with a partner with deep pockets
      (b) Partner with Mitsubishi to develop MRJ/CRJneo
      (c) Engineers transferred to the business aircraft unit will work on:
      i) a model as large as the Global 7500 but with a range large enough to be called the Global 8500
      (ii) partner with one of the manufacturers of supersonic business jets
      (iii) develop a new aircraft-car division for everyone
      (iv) Review the plans and specifications of the Learjet 85 and relaunch this franchise technologically in a different way, emphasizing the name Learjet 95
      (v) Work with Airbus to commercially deploy the electric aircraft
      d) Become an integrator of more efficient and larger components (Bombardier Aerostructures)
      (e) Capitalize on the ownership of the Belfast plant and its innovative wings
      f) Develop advanced public transit technologies based on aeronautical know-how
      h) Focus on the problems of urbanization of societies through an increased supply of green technologies for public transit!
      In short, indeed, a bright future, no doubt, but according to another Bombardier vision. Science fiction? But you, your own story, about the future of Bombardier, what is it?

  5. Will Viking Air rename itself to De Havilland (Canada)?

    I am interested in seeing some information from them on how they expect to run the Q400 business, besides taking over the maintenance of the existing Dash-8 and Q400 fleets.

    • The story says they have bought the De Havilland trademark with the business, so thats highly likely.

      Viking air is owned by Canada’s wealthiest woman Sherry Brydson, a member of the Thomson Reuters media clan ( she is a grand daughter of Roy Thomson)

  6. I am shocked.

    I believe the Q400 has a future, I think it was neglected and undersold.

    As I have stated in the past, you can alwyas throttle back but if the power is not there, you can’t throttle up.

    Its economics are close to the ATR when flown conservatively,
    its got vastly better high and or hot the ATR does not, and it has a wider ability on routes for one engine out. There are a lot of places in the world that is important.

    They can make up scheduled time if running late an ATR can’t touch.

    I wish Viking nothing but success that the entangled BBD could not manage.

    I like changing the name to DeHaviland, it does have an iconic history.

    Interesting that BBD mucked it up as did Boeing

    • given that the CASM economics are similar between ATR and Q400 when operated at similar speeds on similar routes, and the stated advantages in hot/high and making up block time on late departures, the sales success of the ATR must come down largely to commercial terms, i.e. cost, financing, maintenance costs.

      it wouldn’t surprise me at all that Airbus backed ATR not only would be able to undercut BBD on prices but would always undercut them even if they took a loss in search of market share, meanwhile the Q400’s larger engines presumably come with more expensive up front and maintenance costs…

    • Sure you can throttle down to make it more economic, but that won’t change the higher price (around 25%) when bought new.

      Unable to go head to head on price with the ATR 72 at the bottom, and marginalised from above by the E-jets and upcoming MRJ, the Q400 has become very niche.
      What’s left are longer routes (according to the other article over 300nmi)) to/from airports that have decent amounts of passengers but severe limits on what aircraft can land there.

      • Meeting schedules is also a significant factor.

        You can set it up conservative and make up time as needed.

        Yes it costs more up front, but you have to crunch numbers to determine what the ROI is or is not on that extra engine cost. Maint will be a factor but how much is? Larger engines and parts but also lower maint as you would run it as economically as possible and have less wear and tear on said parts.

        Put in fleet comonality being a signfiant facot in these operaitons and if you need it for any reaons, then you would want it for all reasons.

        Ethiropp are of Arfeic is a bit area that benefits from it, South America should, huge area of China and India would. All high and or high and hot.

        Western US.

        Since they start to pya attetnion BBD had picked up some nice sales. As muich the high cost of BBD operation and the ramshackle nature of the company and inept management and ignoring of a possible profit stream for too long.

        The C series was an engineering wonder and the program execution was Boeing like.

        Both program are better off to be taken out of that company train wreck (pun intended) and allow to succeed on their merits.

    • No US carriers want the Q400 and people are now used to RJ’s being faster, quieter, and much less vibration. The next gen RJ’s are slowly replacing the 50 seaters, CRJ and E145’s, and if Boeing can keep the 737 going for 50 years, an upgraded CJ could last another 15 years or so. As far as the MRJ, I am surprised at the delay after delay in coming to market, being so late, it might need to upgraded to perhaps the MRJ-MAX or NEO.

      • MRJ has the latest geared turbo fan from P&W and fully FBW flight deck. No need for any updates

        • Any idea if they are incorporating fly-by-light like the Kawasaki P-1?
          I don’t know if it’s even better for civil aviation purposes, but would be interesting.

          • Unlikely to be certified for civilian aviation usage and be low cost yet. combining with power by wire where hydraulics ,pnuematics etc replaced by powered actuators likely to provide good weight savings and reduce maintenance

      • Reading Boeing and MRJ in one comment made me think about this: what will Mitsubishi do when Boeing merges with Embraer (read take over Embraer)?

        • Was wondering if we going to see another trade complaint as the MRJ is heavy Government subsidized.

          • Also note that Ethiopian Airlines has 33 total (owned and on order)

            Can you say high and hot?

            Any area around Afghanistan, Nepal, China, Regions of Burma.

            North Africa. South Africa. South America.

  7. Not great news, see ~5000 people will lose their jobs.

    If the Q400 “disappears” is the market big enough for ATR and/or Embraer to develop a high performance prop with seating of 70-100, the 175E/E2’s and 190E2 most likely to gobble up a big portion of that market in future.

    Don’t want to get carried away as usual but is there an opportunity for ATR to develop a jet engined over wing version of the ATR with ~80 seats, especially if the CRJ’s future could also be in danger? Engines like the GE-passport, RR-Pearl and PW1715G are around.

    Typical missions less than 2 hours, must have good field performance and potentially use short and/or unpaved strips where E-Jets and CRJ’s cant get into.

    • Anton, your question was answered some 3 years ago when the ATR ceo proposed a 100 seater ATR. Airbus owning 50% in ATR blocked it.

      Some said it was to protect the A319. If that was so it would now be even more the case as the new Airbus offering starts with the much smaller 220-100.
      Airbus itself said back then, that after years ATR is finally generating some profit and they are not interested in investing billions that have probably the lowest possible return of investment among all Airbus products and indeed, for a turboprop you can t charge much and production numbers are low.

      So, a bigger turboprop if ever it happens I could only imagine if, something like this happens: India/South Africa/Ethiopia wants to create a big aerospace industry, buys the Q series, sinks 2-5 billion into it and creates a beautiful white elephant. But economically a bigger turbo prop is currently not feasible.

        • I d love that one, but to my knowledge it was said back then when they discussed the 100 seater ATR 3 years ago, that in the current ATR 72 design there is not much margin for a stretch. I remember it was said that 4-8 seats extra would be technically feasible, but that was not worth the effort.

          So, an ATR 92 would be basically an new plane, recycling just the fuselage of the 42/72.

          Apart from that, ~70 pax there are not so many producers, but MRJ is optimized for 90 pax, SSJ for 87-100, An 158 for 99, E 190 for 94, CRJ 900 for 76, CRJ 1000 for 97 … so do you really think, it is a good idea to move your plane exactly to a size that is already poisoned by over supply and ruinous discounts?

          • You right, there is basically an oversupply of aircraft in the 70-100 seat market (there is also the ARJ21) but if the Q400 goes there will be a lack of a high performance large prop. Maybe the Q400 could survive as a niche aircraft under the Viking umbrella.

            Could ATR develop a higher performance model of the ATR72 depending on engine availability?

            Is the 40-70 seat market dead, the future in this class probably electric? But the ERJ145 and CRJ200 out of production and the CRJ700 nearly so, only the ATR42 in this class.

            Was wondering if BBD is thinking to revive the CRJ500 which was an CRJ200 with the 700/900’s wing but dropped it in 2001. Not sure if the Global 8000’s wing could be adopted for say the CRJ700 and RR Pearl15 engines be used for a fast 50-70 seat aircraft with range of up to 3000Nm?

            …or is BBD cleaning the deck to get involved with the MRJ, the MRJ70 most likely the ideal CRJ900 replacement?

    • 5000 jobs, hate to see that. One positive, the rest of the aerospace seems booming. So there are opportunities to be found. Still sucks if you and your family are located / integrated at a place & this happens.

      • It is a sad issue.

        However, if Viking maintains the line, then those jobs will transfer.

        People likely will have to as well.

        Supply chain maintains which is jobs as well.

    • Anton, why would ATR develop a jet engined plane?

      That’s Airbus territory- and as mentioned Airbus didn’t even let ATR go for a updated version of it’s existing product.

      It looks like turbo props are very niche and don’t justify any development cost, though I think there is demand.

      There are plenty of regional jets available, MRJ is comming, E2 jets are arround. I see a hard time for a CRJ and it would basically need a new fuselage, a new wing and new engines.
      That’s what the C series had, and I can’t see Bombadier finance another huge development to end up with a product quite similar to E2 jets.

      We have to face it, the CS ruined Bombadiers’ aeroplane business and they will be out sooner or later or downgraded to built business jets only.
      Dash is outdated, CRJ is outdated, both are selling in small numbers and there are better competitors available.

  8. I wonder if the new turboprop sales guy at Airbus might take a look at buying the Q400 line in the future given his penchant for that segment of the market. Might make a good seed airplane for startups which could then upgauge to the A320neo family as they grow.

    • You’re aware of Airbus owning 50% of ATR?

      Wouldn’t it make more sense to become a major partner or majority owner of the MRJ program?

    • Airbus owns 50% of ATR. Probably competition authorities would not allow that Airbus owns both remaining turbo-prop-lines.

      If they get it, they would probably close it, as it is better to have 1 very well running line than one ok-ish running line and one loss making line.

      • Sheee, there is no way authorities would allow Airbus to buy Q not to mention Airbus does not want it.

        Did you read the news, Viking bought it?

        • I don’t think competition authorities would be an issue. They usually take a different view when one of the entities is teetering. Much like when American Airlines purchased failing Trans World Airlines.

          Viking could just be acquiring the Q400 opportunistically at a rock bottom price with plans to flip it. Agree under normal conditions it probably wouldn’t happen with Airbus management but the new sales guy appears to be more of a turboprop guy at heart.

          • Oh for crying out loud.

            That would be like Airbus buy the Boeing 737 line.

            You don’t think that BBD could have sold it to someone, so Viking buys it and flips it to Airbus?

            That is like thinking I am the next candidate to be the Pope. And no I am not Catholic.

          • And that is not to mention the so called Turbo Prop guy had an entire career having nothing to do with Turob props, he was parked at ATR until they wanted to put him in a big job (now the biggest)

            I worked at a bank once, that does not make me a banker.

      • Hello ChrisAustria,

        Regarding: “Airbus owns 50% of ATR. Probably competition authorities would not allow that Airbus owns both remaining turbo-prop-lines.”

        That is what happened in 1991 when ATR tried to buy De Havilland – Canada and the Dash 8 line from Boeing, who had purchased De Havilland-Canada from the Canadian government in 1986.

        “Boeing bought de Havilland Canada in 1986 and engineers were soon designing a high speed 70-seat Dash 8 Series 400 (DHC-8-400) to replace older technology jets in the 65- to 100-seat class. The new Series 400 was on the brink of official launch in 1990 when Boeing put de Havilland up for sale.

        When a deal to sell de Havilland to arch rival ATR was blocked by the European Commission, Bombardier teamed up with the Government of Ontario (as a 49 per cent equity partner) to buy the company. Federal and provincial agencies pledged almost $600 million to revive the Toronto aircraft production operation. (Ontario sold its 49 per cent interest in 1997).”

        • Interesting to read Boeing was ok with selling an aircraft division to a government subsidised entitity, but 25 years later started a trade case against the same entity for receiving government subsidies.

          • It wasn’t the subsidies that Boeing objected to as such- after all they recieve their share- it was the selling below price it was sold in Canada, which violated unfair trade rules. The general term is called ‘dumping’

  9. “given that the CASM economics are similar between ATR and Q400 when operated at similar speeds on similar routes, and the stated advantages in hot/high and making up block time on late departures, the sales success of the ATR must come down largely to commercial terms, i.e. cost, financing, maintenance costs.”

    I don’t believe that for a second. The Q400 is much heavier, expensive to buy & operate. Also when operated at similar speeds.

    • everything I had read prior to this stated that the fuel cost economics were in the noise when Q400 was flown at ATR speeds.

      I assume the fuel cost in this table speaks to “design speed” i.e. with the Q400 operating at its faster cruise speed.

      the extra seats in the Q400 (especially the new 88 seat version) should also change the economics)

      • Hello Bilbo,

        Regarding: “everything I had read prior to this stated that the fuel cost economics were in the noise when Q400 was flown at ATR speeds”

        If a manufacturer is not giving away it aircraft for free, then in addition to operating costs, one must consider purchase price, monthly purchase loan payment prices, and/or lease prices. Non-free aircraft cost you money to own, even if they are just sitting on the ground and not flying. Below is an excerpt from an 11-8-18 Forbes article whose author reports that some “observers” believe that Bombardier was trying to charge a premium for the Q400’s additional capabilities, but that most potential operators weren’t willing to pay the premium. In order for a business model of selling something at a premium price to work, the customers have to be willing to pay a premium for that something. Is the regional turboprop business a Cadillac/Lexus market, or a Chevy/Toyota market? Did Bombardier’s original plans to sell the C-Series at a premium price due to its better fuel economy and newer design encounter the same problem the Forbes article is suggesting, because many customers were not willing to pay the premium purchase, loan, or lease price that Bombardier wanted for the product offered? It seems to me that only when C-Series prices were slashed to A319 and 737 levels did sales take off.

        “The Q400 is a higher-performance turboprop than competitor ATR’s, but observers say many regional airlines haven’t seen a need for its capabilities at the correspondingly higher price.”

        • So the interesting question is at what price Viking will be able to offer the Q400.

        • BBD also did not emphasize it can run close to the same economic as the ATR.

          They sold it on its like Jet speeds.

          They have changed, sales are up, but too late for BBD.

          Best wishes and hopes to Viking for a successful operation with it.

  10. One might wonder if Bombardier is paring these products in a anticipation of a total takeover of its commercial aerospace division from Airbus Corporation; on par with Boeing trying to own the Embraer operation. In many ways this would make sense. You get the same cockpit (in the future) from 70 seats up to 470, you deal with one company instead of multiple and the general economy of scales. One knows they would not have to pay much for a new plane that has over 400 orders. Also a customer base for the RJs. And then Bombardier has a few aerospace factories throughout the World.

    • So, Airbus gets the whole CS business from BBD. Nice

      Whats left of BBD that anyone really wants aerospace wise?

      • Airbus only got 50.1% of the marketing and final assembly of the Cseries. Im presuming the wings and other large structures that arent from suppliers will stay with Bombardier.
        Just looked up the Bombardier Aviation revenue numbers for 2017 year.
        Its an almost C$9 bill company, divided into , Business, Commercial and Structures divisions.
        There was also $600 mill ‘booked’ from the sale of Downsview for the 2018 results. The Global family of business jets will move to a new final assembly line at Toronto-Pearson Airport.

      • Cold hard cash to pay off the debt and keep the business aircraft and rail transportation business viable.

  11. I suppose the good news is it is being bought by a Canadian company instead of given away to a competitor for $1 as happened with the CSeries. I do wonder how a small player like Viking can be successful in marketing passenger aircraft. Hopefully they will surprise us – after all lets not forget when Bombardier took over de Havilland it was better known as a manufacturer of snowmobiles (long spun off) and look at the successful run Bombardier has had (culminating in designing and building the most advanced single isle jet today ditto the largest and most advanced business jet). According to the Viking press release they plan to run the business as “business as usual” at the Downsview site until 2021 (Bombardier sold the site but have a lease until 2021). It will be interesting to see what the plans will be after this. Where will the FAL be relocated? As other have mentioned it would make a lot of sense for Viking to rename the company “de Havilland Canada” as they now own the rights to this fabled aviation name.

    • They are selling a commercial turbo prop, the Modernized Beaver.

      The Q Series is not that huge a step.

      They have been working on and with turbo props a long time.

      • And how many of the modernized Beaver have they sold?
        It’s a marketing game for the Q400, and if it can’t sell find out why and fix it.
        In my country they had the Q300 version so it should have been a shoe in for larger Q400, but no they went to the ATR.
        Seems crazy now but the ‘faster’ Q400 was competing against the same company’s CRJ700. Duh

  12. For the technical orientated, could winglets on an ATR type wing bring improvements to max cruising speed, fuel burn, MTOW, etc. or will it be insignificant?

    • Adding winglets to the ATR72 wing would require significant redesign of the ailerons. Because the ailerons are actuated with cables and not hydraulic, they are equipped with “horns” (like older aircraft) that extend all the way up to the wing tip to help the pilots deflecting them.

      That’s quite some work but it is not impossible. In fact, some of the research projects within the Clean Sky 2 program looked at such operation on a similar type of aircraft.

  13. The ATR goes so slow it would not help[

    The Q400 might benefit from that.

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