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Mitsubishi Heavy Industries to Acquire Bombardier’s Regional Jet Program

June 25, 2019 / WIL BALDWIN

MHI now positioned to transform and lead the underserved regional jet business, with bolstered customer support services
Key step in MHI’s strategy of expanding its aircraft business globally, with a mid-term focus on North America
Completes Bombardier’s aerospace transformation and refocus on business aviation

Mitsubishi Heavy Industries, Ltd (MHI) (TOKYO:7011) and Bombardier Inc (TSX: BBD.B) announced today they have entered into a definitive agreement, whereby MHI will acquire Bombardier’s regional jet program for a cash consideration of $550 million USD, payable to Bombardier upon closing, and the assumption by MHI of liabilities amounting to approximately $200 million USD. Under the agreement, Bombardier’s net beneficial interest in the Regional Aircraft Securitization Program (RASPRO), which is valued at approximately $180 million USD, will be transferred to MHI.

Pursuant to the agreement, MHI will acquire 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 type certificates.

This acquisition is complementary to MHI’s existing commercial aircraft business, in particular the development, production, sales and support of the Mitsubishi SpaceJet commercial aircraft family. The maintenance and engineering capabilities of the CRJ program will further enhance critical customer support functions, a strategic business area for MHI in the pursuit of future growth.

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.”

Izumisawa concluded, “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.”

“We are very pleased to announce this agreement, which represents the completion of Bombardier’s aerospace transformation,” said Alain Bellemare, President and Chief Executive Officer, Bombardier Inc. “We are confident that MHI’s acquisition of the program is the best solution for airline customers, employees and shareholders. We are committed to ensuring a smooth and orderly transition.”

Bellemare continued: “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.”

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.

Bombardier will also retain certain liabilities representing a portion of the credit and residual value guarantees totaling approximately $400 million USD. This amount is fixed and not subject to future changes in aircraft value, and payable by Bombardier over the next four years.

The transaction is currently expected to close during the first half of 2020 and remains subject to regulatory approvals and customary closing conditions.

The agreement contemplates a reverse break fee payable by MHI under certain circumstances.

About MHI

Mitsubishi Heavy Industries, Ltd. (MHI), headquartered in Tokyo, is one of the world’s leading industrial firms with 80,000 group employees and annual consolidated revenues of around US$38 billion. For more than 130 years, the company has channeled big thinking into innovative and integrated solutions that move the world forward. MHI owns a unique business portfolio covering land, sea, sky and even space. MHI delivers innovative and integrated solutions across a wide range of industries from commercial aviation and transportation to power plants and gas turbines, and from machinery and infrastructure to integrated defense and space systems.

For more information, please visit MHI’s website: www.mhi.com/index.html

About Bombardier

With over 68,000 employees, Bombardier is a global leader in the transportation industry, creating innovative and game-changing planes and trains. Our products and services provide world-class transportation experiences that set new standards in passenger comfort, energy efficiency, reliability and safety.

Headquartered in Montreal, Canada, Bombardier has production and engineering sites in 28 countries as well as a broad portfolio of products and services for the business aviation, commercial aviation and rail transportation markets. Bombardier shares are traded on the Toronto Stock Exchange (BBD). In the fiscal year ended December 31, 2018, Bombardier posted revenues of $16.2 billion US. The company is recognized on the 2019 Global 100 Most Sustainable Corporations in the World Index. News and information are available at bombardier.co m or follow us on Twitter @Bombardier.

Bombardier and CRJ are trademarks of Bombardier Inc. or its subsidiaries

Bombardier Concludes Sale of Q Series Aircraft Program

June 3, 2019 / WIL BALDWIN

Bombardier (TSX: BBD.B) confirmed today the closing of the previously announced sale of the Q Series aircraft program assets to De Havilland Aircraft of Canada Limited (formerly Longview Aircraft Company of Canada Limited), an affiliate of Longview Aviation Capital Corp., for gross proceeds of approximately $300 million. Net proceeds are expected to be approximately $250 million after the assumption of certain liabilities, fees, and closing adjustments.

Longview will carry on the production of Q400 aircraft at the Downsview Facility in Toronto, and will continue performing aftermarket services for Q Series aircraft. Bombardier will provide transitional services and will license certain intellectual property to Longview to facilitate a seamless transition of the Q Series aircraft program.

Bombardier To Create Single Aviation Division

May 2, 2019 / WIL BALDWIN

MONTREAL (Reuters) – Canada’s Bombardier Inc said on Thursday it would unite its corporate and regional jet-making units into a single aviation division, as it continues focusing on its strongest businesses while shedding aerostructure facilities in Belfast and Morocco.

The announcement comes ahead of an annual general meeting later in the day, where the plane and train maker is expected to face questions from investors on whether its turnaround plan is still on track as its transportation unit grapples with delayed rail contracts.

Investors were rattled last week when Bombardier cut its first-quarter and full-year revenue targets for the transportation division, its largest unit, raising concerns over whether it will still meet its 2020 targets of boosting margins and generating $20 billion (£15 billion) in revenue.

Bombardier on Thursday posted first-quarter revenue and profit, in line with revised expectations issued a week ago, when it sharply cut estimates for full-year profit and revenue.

It had slashed its full-year transportation revenue forecast by almost 8 percent to about $8.75 billion.

The company said in a statement it was making progress toward completing five long-term rail projects that have been marred in some cases by delivery delays and production problems, but these would take a few more quarters for completion.

Bombardier’s planned sale of its Belfast wing and structure-making operation, the largest high-tech manufacturer in Northern Ireland which employs 3,600, stunned workers who called on the British government to retain jobs.

A separate facility which produces aeronautical-equipment in Morocco will also be sold.

Under Chief Executive Alain Bellemare, Bombardier has been selling off businesses, including the money-losing Q400 turboprop program, to focus on more profitable units like rail and corporate jets.

The rail division, which is expected to generate $10 billion next year, is crucial to Bombardier’s five-year turnaround plan, after heavy investment in aircraft production drove it to the brink of bankruptcy in 2015.

Besides creating a single aviation division headed by business aircraft president, David Coleal, the company said it will consolidate its five aerostructures businesses to focus on facilities in Montreal, Mexico and its newly acquired Global 7500 business jet wing operations in Texas.

Bombardier’s commercial aircraft president Fred Cromer will continue to lead efforts as the company weighs the future of its money-losing regional jet program.

Some investors have questioned Bombardier’s credibility in revising its financial guidance after a recent debt raise.

“The concern, particularly after the March debt raise, is whether management remains committed to its longer term 2020 guidance,” said Toronto-based AltaCorp analyst Capital Chris Murray by email.

“We expect that during that process, the company had reiterated prior 2019 guidance, which it changed last week, adding to concern on the part of bondholders.”

A Bombardier spokesman declined to comment and said management would address questions at the meeting.

Bombardier said it continues to expect full-year free cash flow to be breakeven, plus or minus $250 million, as Global 7500 aircraft and key transportation project deliveries are expected to accelerate in the second half of the year.

Adjusted core earnings rose by $1 million to $266 million in the three months to March 31, while revenue fell 13 percent to $3.52 billion.

(Reporting By Allison Lampert in Montreal. Additional reporting by Arathy Nair in Bengaluru and Fergal Smith in Toronto; Editing by Arun Koyyur and Bernadette Baum)

FILE PHOTO: Logo of Bombardier is seen at an office building in Zurich, Switzerland February 28, 2019. REUTERS/Arnd Wiegmann

Close To 85,000 Travelers Took VIA Rail During Easter Weekend

April 29, 2019 / WIL BALDWIN

MONTRÉAL, April 25, 2019 – VIA Rail Canada (VIA Rail) continued its long multiple-quarter streak of increased revenue with a solid performance over Easter weekend. Passenger revenue was up 8,8% from 2018’s Easter break, giving the Corporation its best performance in 10 years.

Out of the approximately 85,000 travelers who chose VIA Rail to get around, more than half boarded trains within Ontario on routes that included Ottawa – Toronto, where 10 departures are offered each day in both directions. As for interprovincial travel, 29% of passengers took the train between Ontario and Quebec, particularly on the Montréal – Toronto and Montréal – Ottawa segments. In six days, VIA Rail trains covered a total distance of 28 million kilometres.

Of the busiest segments, the most notable increases over the long weekend were between Montréal and Québec City, Ottawa and Québec City, and Kitchener and Toronto, where passengers opted to take the train instead of their cars for a comfortable and worry-free springtime getaway with their friends or family.

“Our transformation plan continues to pay off as we bring Canadians towards a more sustainable future,” said Yves Desjardins-Siciliano, President and Chief Executive Officer of VIA Rail. “These results are a testament to the growing popularity of train travel and to our commitment to offering passengers a sensible, green alternative to road travel and an easy, sustainable and enjoyable travel experience. This is VIA Rail’s contribution to the future of Canada and of Canadian communities. I commend the sustained efforts and the remarkable devotion of our employees, who are largely the drivers of VIA Rail’s success.”

VIA Rail cross-Canada routes

Most popular route: Ottawa – Toronto
Most notable ridership increases on the Québec City – Windsor corridor: Montréal – Québec City (up 15%), Ottawa – Québec City (up 11.6%) and Kitchener – Toronto (up 9.8%)
24.7% revenue and 8.9% ridership increases on non-Corridor routes (Toronto – Vancouver and Montréal – Halifax long-distance trains, and regional routes)
Busiest day: Thursday, April 18

About VIA Rail Canada
As Canada’s national rail passenger service, VIA Rail (viarail.ca) and all its employees are mandated to provide safe, efficient and economical passenger transportation service, in both official languages of our country. VIA Rail operates intercity, regional and transcontinental trains linking over 400 communities across Canada and about 180 more communities through intermodal partnerships, and safely transports nearly 4.8 million passengers annually. The Corporation has been awarded five Safety Awards and three Environment Awards by the Railway Association of Canada since 2007. Visit the “About VIA Rail” section at https://www.viarail.ca/en/about-via-rail.

Bombardier Celebrates Delivery of Q400 Aircraft to Qazaq Air

April 12, 2019 / WIL BALDWIN

Bombardier Commercial Aircraft today celebrated the delivery of the first of two Q400 aircraft ordered by Qazaq Air JSC of Kazakhstan (“Qazaq Air”) in 2017. The order followed Qazaq Air’s successful launch of domestic service in Kazakhstan in July 2015, using three leased Q400 aircraft.

Qazaq Air’s Acting Chief Executive Officer, Adel Dauletbek and the airline’s Head of Public Relations, Sergey Khetsuriani, joined the airline’s flight and acceptance crew during a special delivery ceremony at Bombardier’s Toronto site where the Q400 aircraft is manufactured. H.E. Akylbek Kamaldinov, Ambassador of Kazakhstan to Canada was in attendance as well as Bombardier Commercial Aircraft’s team which included Ross Mitchell, Vice President, Commercial Operations and Mark Gilbert, Director, Sales.

“We are delighted with the performance of our fleet of Q400 turboprops and are excited to welcome the additional aircraft into our operation,” said Mr. Dauletbek. “With our larger fleet, our customers will benefit from the expansion of our route network within Kazakhstan, as well as to nearby cities in the Central Asian region.”

“We congratulate Qazaq Air on the growth of its operations and expansion of its network,” said Mr. Mitchell. “The Q400 aircraft continues to prove itself in some of the most challenging locations around the world. The aircraft’s speed, range and fuel efficiency, and especially its certification for operations down to -54°C make it ideal for operations on Qazaq Air’s long routes in the Kazakh market.”

About Qazaq Air

Qazaq Air is a young, dynamically growing regional airline in Kazakhstan, 100 per cent of which is owned by “Samruk-Kazyna” Sovereign Welfare Fund.

About Q400 Aircraft

Designed as a modern, 21st-century turboprop, the Q400 aircraft is the most recent development in the Q Series family of aircraft. It provides unmatched performance, operational flexibility and passenger comfort. In addition to the standard single-class configuration, Q400 aircraft are available with an optional dual-class interior for enhanced passenger comfort; in an optional extra-capacity configuration offering up to 90 seats for higher-density markets; and in a cargo-passenger combi configuration.

Bombardier Signs Firm Purchase Agreement for 6 Q400’s

April 1, 2019 / WIL BALDWIN

Toronto, March 29, 2019 – Bombardier Commercial Aircraft announced today that a customer, who has requested to remain unidentified at this time, has signed an order to acquire six new Q400 aircraft.

Based on the list price of the Q400 aircraft, the firm order is valued at approximately US$ 202 million.

“The Q400 aircraft offers the perfect balance of passenger comfort and operating economics while maintaining its unmatched range and speed advantage versus other turboprops,” said Fred Cromer, President, Bombardier Commercial Aircraft. “The demand for turboprop aircraft worldwide is tremendous and the Q Series aircraft are ideally positioned to meet the needs of regional airlines as they offer a unique ability to serve diverse and challenging environments. The Q400 offers the lowest seat costs amongst turboprops, with an enhanced passenger experience and a proven 99.5 per cent reliability.”

About Bombardier

With over 68,000 employees across four business segments, Bombardier is a global leader in the transportation industry, creating innovative and game-changing planes and trains. Our products and services provide world-class transportation experiences that set new standards in passenger comfort, energy efficiency, reliability and safety.

Headquartered in Montreal, Canada, Bombardier has production and engineering sites in 28 countries across the segments of Transportation, Business Aircraft, Commercial Aircraft and Aerostructures and Engineering Services. Bombardier shares are traded on the Toronto Stock Exchange (BBD). In the fiscal year ended December 31, 2018, Bombardier posted revenues of $16.2 billion US. The company is recognized on the 2019 Global 100 Most Sustainable Corporations in the World Index. News and information are available at bombardier.com or follow us on Twitter @Bombardier.

Canada’s Answer to Tesla Is a $15,500 Electric 3-Wheeler

February 13, 2019 / WIL BALDWIN

(Bloomberg) — It’s all-electric like a Tesla. It’s priced like a Ford Fiesta. It’s one of the oddest-looking vehicles you’ve ever seen — and it may just redefine the commuter car.

As General Motors Co. prepares to shut the plant near Toronto that got car-making started in Canada more than a century ago, a new model is taking shape in a tiny production facility in Vancouver’s outskirts.

Meet the Solo — a one-seater vehicle made by Electra Meccanica Vehicles Corp. that costs $15,500. By December, 5,000 will be zipping around the streets of Los Angeles, with an additional 70,000 to be delivered over the next two years across the West Coast. Electra Meccanica may have a market value of just $80 million, yet it has $2.4 billion in pre-orders. The stock almost doubled in New York Wednesday.

Click the link for the full story! https://finance.yahoo.com/news/tesla-apos-latest-competitor-15-220000179.html

The company also has designs on the 4-wheel market…

Fly Jamaica Boeing 757 Damaged In Georgetown, Guyana

November 12, 2018 / WIL BALDWIN

Six passengers suffered non-life-threatening injuries on November 9th, when a Fly Jamaica Boeing 757 made an emergency landing at the Georgetown, Guyana international airport. The aircraft reported technical problems with the plane’s hydraulic system as it climbed through 19,000 feet on its way from Cheddi Jagan International Airport in Georgetown, Guyana to Toronto, Ontario, Canada.

The airplane was carrying 120 passengers and eight crew, and requested permission to return to Guyana shortly after take-off, Guyana officials stated. The plane reportedly overshot the runway upon landing at approximately 2:53 a.m. local time. The runway had recently been extended, an airport official stated.

The Guyana Civil Aviation Authority has launched an investigation, with the assistance of the U.S. National Transportation Safety Board. Officials from Boeing are also looking into the incident. The aircrafts right under carriage collapsed after the aircraft ran off the runway, causing severe damage to the airframe.

You can view a summary of the incident at the Youtube video link below!

Fly Jamaica Guyana Emergency Landing

Image from my-island-jamaica.com

About MHI

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