Mitsubishi Heavy Industries (MHI) group on Monday confirmed the purchase of Bombardier’s CRJ regional jet program for $550 million. The completion of the deal had been raising doubts in recent weeks due to budget cuts for Mitsubishi Aircraft’s SpaceJet project amid the coronavirus crisis.
MHI undertakes maintenance, support, refurbishment, marketing and sales activities for the CRJ series aircraft, including related services and support networks located in the Canadian provinces of Quebec and Toronto and their service centers in the USA in West Virginia and Arizona, as well as the type certificates for the jets. Under the deal, the Japanese group also inherited $200 million in debt related to Bombardier’s regional jets.
The Canadian manufacturer will still continue to supply components and spare parts and will assemble the remaining 15 CRJ jets in the order book on behalf of MHI until full delivery of current orders, scheduled for the second half of 2020. Mitsubishi’s new division will be based on Montreal, called MHI RJ Aviation Group, but does not include the aircraft production right.
In a statement, MHI RJ says it will provide a “holistic service and support solution for the global regional aircraft industry, including the CRJ series aircraft.”
“There is new energy on board and our team is committed to serving the regional aviation market and becoming a platform for growth in the industry,” says MHI RJ chief executive Hiroaki Yamamoto.
Market analysts consider the acquisition of Bombardier’s regional jet program a smart solution for MHI due to the global network of CRJ-related services. Mitsubishi Aircraft’s SpaceJet program needs this presence around the world to help boost sales of new aircraft manufactured in Japan and expected to hit the market in mid-2023, if there are no further delays and cuts in the program.
According to Cirium’s fleet data, there are currently around 820 CRJ jets in operation worldwide.
Bombardier leaves commercial aviation
With massive debts, Bombardier decided to dispose of all its assets in commercial aviation. In 2019, the company sold the production rights and factories for the QSeries turboprops to the Canadian Canadian group Longview Aircraft Capital, which renamed the series again with its original name, Dash 8. Another major downturn was the sale of the Short Brothers division in Ireland. Norte, which belonged to the group since 1977.
Earlier this year, Bombardier also sold its stake in the A220 (ex-CSeries) program, bought by Airbus for $ 591 million – the province of Quebec still holds 25% of the program. Bombardier’s role in aviation is now limited to executive jets, a niche where the Canadian manufacturer still has a certain relevance and strength to continue in the market with long-range models and Learjet, one of the best-known brands in the segment.
In addition to aviation, the Canadian group also sold its railway division to the French company Alstom.