Mitsubishi Has Purchased Bombardier’s CRJ Program

After diversifying their portfolio just 20 days ago when Bombardier sold the Q400 aircraft program to Viking Air, rumors have lingered that Bombardier is looking to offload one more asset – the unprofitable CRJ program.

These past few years, Bombardier has been restructuring their processes.

As a result, the Canadian company has posted a net profit for the first time in 4 years in 2018, partly due to the sale of the CSeries aircraft to Airbus. Formerly CSeries and now known as the A220, the single-aisle jet became a huge success for Airbus.

Nevertheless, Bombardier sought to also sell the rest of the CRJ program to further reduce their debts and focus on their profitable side of aviation business – Business aircraft.

And it seems like the Canadian manufacturer has finally found the perfect match to buy the CRJ program.

Mitsubishi Heavy Industries will purchase Bombardier’s CRJ program for $550 million and will be liable to pay Bombardier’s CRJ program debts, which stand at an approximate amount of $200 million.

Customer support is the focus

After rumors broke through in the media that Bombardier is discussing the option sell the unprofitable regional jet program to the Japanese giant, which is trying to enter the regional jet market with their own MRJ, Bombardier officially disclosed that it is indeed happening.

While at first Mitsubishi was just only a potential counterparty, the status quo changed today as both parties got the green light to go ahead with the deal.

The deal seems logical enough, as it complements the direction both Bombardier and Mitsubishi are heading.

For Bombardier, the CRJ program sale will allow the Canadian manufacturer to focus on its profitable business aviation program. At the same time, Bombardier’s Learjet, Challenger and Global brands will be united under Bombardier Aviation.

On the other hand, Mitsubishi will be able to secure crucial facilities to further pursue their aggressive entry into the North American market with the SpaceJet, which was formerly known as the MRJ.

Those facilities include maintenance, support, refurbishment and even marketing and sales assets of the CRJ program.

The Japanese manufacturer has struggled for a long time to launch the SpaceJet. At first, Mitsubishi planned that airlines will start commercial flights in 2013.

Now, the timeline has shifted and Mitsubishi expects the SpaceJet to conduct first commercial flights in 2020.

Nevertheless, the acquisition is great for Mitsubishi.

As Sukhoi unfortunately proved, having an extensive support network, which includes maintenance and the ability to provide spare parts to the customers of the Sukhoi Superjet is crucial. Airlines had to resort to such measures as cannibalizing their own SSJ's to provide spare parts and even cancel their standing orders due to all of the maintenance issues the Russian aircraft is facing.

And with Mitsubishi acquiring these facilities, the company has saved a lot of money by not constructing their own support network, which could‘ve potentially cost billions of dollars to the Japanese company.

In addition, Mitsubishi will try to ensure a much smoother maintenance process for airlines that have ordered the SpaceJet.