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Canadian Investing / Canada (General)


Subject:  Re: VL Report On Bombardier Date:  9/19/2012  11:34 AM
Author:  rev2217 Number:  63033 of 64591


Generally I'm not all that impressed with the CRJ1000. It's probably the Bombardier product in which I have the least amount of confidence.

I don't know if I've expressed this to you before or not, but it strikes me as a stretch-too-far.

If the plane flies serviceably, I doubt that it will fulfill your fears of a stretch too far. It's a LOT cheaper to stretch an existing model than to design a new plane from scratch, so the company does not have to sell very many planes of the new model to make a profit on it.

Embraer built a completely new design for this seating capacity - the E-190, and it has taken most of the market. I don't believe you can compete against that very well with a stretch.

Yes, and that is very much a mixed bag in the market. A new design can optimize the form factor (the ratio of the diameter to the length of the fuselage) to optimize factors such as the ratio of the diameter to the length of the fuselage and the weight of the structure, to optimize cost of operation of the specific model, in isolation, potentially making the new model very available to companies that don't already operate the company's line of aircraft. In reality, however, very few airlines operate a single model in isolation because they need multiple models to match capacity with demand on various routes at various times of day. The result is that the economics of commonality -- the ability of a single pool of flight crews to operate several models of aircraft, a single team of mechanics to maintain several models of aircraft, and a common supply of spare parts for multiple models of aircraft -- are much more significant than marginal gains in fuel economy. For airlines that already operate the CRJ-700 and CRJ-900 models and need a slightly larger aircraft, or that also need to operate aircraft of this range of size, the CRJ-1000 is the only viable choice.

But splitting hairs, I thought that the E-190 was a stretch of the E-170, which was a completely new design. Embraer's smaller models, the ERJ-135 (approx. 35 seats IIRC) and ERJ-145 (50 seats) have a smaller fuselage than the CRJ series, with only three seats (2+1) per row. From a technical standpoint, a stretch of this design to 70 seats would have been marginal and a further stetch to 90 seats most assuredly would not have been viable.

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