Bombardier Prepared For Changes In 50-Seat Regional Jet Sector
Aviation Daily Jun05, 2012 , p. 1.01
Andrew Compart



Bombardier does not expect any undue pressure from Delta Air Lines ’ planned reduction of its Bombardier CRJ100/200 fleet, which could cut close to 200 aircraft from the carrier’s feeder operations in the coming years.

More than 1,100 variants from the CRJ100/200 family have been built since the first delivery in 1991, including the Challenger 800 business jet variant , and 83 have been retired since 2003, an Aviation Week analysis of fleet data shows. By contrast, only two of competitor Embraer ’s 1,151 ERJ twinjets have been retired, and both were prototypes, although with 102 airframes stored, the Embraer regional jet outpaces the CRJ storage rate by 20 units.

Despite these numbers, Ron Sheridan, VP-asset management and structured finance for Bombardier Commercial Aircraft, says the CRJ market is not weaker than the ERJ’s but merely the victim of a series of liquidations and restructurings among operators, particularly in the mid-2000s. Sheridan notes that the condition of aircraft returned in bankruptcy often makes them difficult to market and more likely to be scrapped.

Embraer has not faced that situation as often, adds Sheridan.

Calgary, Canada-based Avmax, a leasing and maintenance group that acquires CRJs for parts and leasing, echoes Bombardier ’s supply and demand analysis.

“There is a huge market out there for the CRJs , but also a huge amount of CRJs for sale,” says Bunny Bundell, director of contract, sales and leasing for the company’s Avmax Aircraft Leasing division.

Figures compiled by Airfax, which provides up-to-date information on the availability of commercial transport aircraft, show the number of CRJ family aircraft on the market rising by almost 25% since the start of 2012 to about 40 airframes, although this is still less than the peak of about 60 available when Delta Air Lines and Northwest Airlines (both major CRJ operators) filed for Chapter 11 protection. Those reorganizations and the 2006 liquidation of U.S. regional Flyi prompted Bombardier to double the size of its commercial aircraft asset management group to support CRJ remarketing. In 2009, the group also established a permanent sales office in Moscow as part of its effort to make the sales less U.S.-centric and broaden the CRJ customer base. That base has expanded from 31 operators in 2006 to 56 today, more of which are in Russia and the Commonwealth of Independent States than in the U.S., says Sheridan.

Bombardier also considers Africa a prime market.

Also in 2009, Bombardier Services Corp. signed an agreement with Charlotte, N.C.-based Magellan Aircraft Services to disassemble CRJ100/200 jets, refurbish components and market them to operators. At that time, Sheridan says, the market for the aircraft had expanded so rapidly that there was a huge requirement for spares, with some companies paying as much as $6 million for a CRJ in 2006 “just to turn it into a parts department.”

Of the 83 CRJs retired since 2003, the Aviation Week database shows that 31 were last operated by Delta’s wholly owned Comair division. Another 15 were last operated by Tyrolean Airways in Austria. Thirteen were last operated by Mesa Air group , which returned a large part of its fleet during its 2010 Chapter 11 restructuring, and eight by France-based Aer Littoral, which went into bankruptcy protection in 2003 and closed in early 2004.

CRJ100/200 retirements held steady between six and eight aircraft a year from 2006 to 2009, but increased to 32 units in 2010 with 13 from Mesa, seven from Tyrolean, six from Comair and small batches from numerous other carriers . Former Comair-operated aircraft accounted for seven of the 12 retirements in 2011 and four of the five so far this year.

Sheridan does not expect such large numbers of retirements in the coming years, even with Delta’s planned phase-out, because of the broader operator base—which he says could top 60 by the end of this year—and the generally good condition of the 50-seaters coming off lease .

Delta plans to return many of its 50-seaters just before major engine overhauls come due. But Airfax publisher Jim Williams notes that the aircraft could be acquired at a lower price in that condition , and that General Electric —which supplies engines to the entire regional jet fleet —likely will offer deals on engine overhaul costs to reap the benefits of years of continued maintenance.