Bombardier Aerospace hit as Mesa Air Group undergoes bankruptcy protection, restructuring

Bombardier Aerospace, the aircraft-manufacturer headquartered in Montreal, Quebec, Canada, is at risk of losing an order for 10 regional jets after the Mesa Air Group, based in Phoenix, Arizona, the United States, obtained bankruptcy protection and  needs to reduce the size of its fleet to cut operating costs.

The Mesa Air Group said in a statement that it has around 50 of its 130 aircraft parked and that it needs trim down its fleet in order to get rid of huge costs related to retaining, maintaining and storing excess aircraft.

A majority of the Mesa Air Group’s fleet of planes comprises Bombardier aircraft.

Bombardier Aerospace, a division of Bombardier Incorporated, is the third biggest aircraft-maker in the world in terms of overall yearly delivery of commercial aircraft, and the fourth largest aircraft company in the world in terms of yearly delivery of regional jets.

Bombardier makes a wide range of regional aircraft and business jets, including the famed Learjet range and Canadair range.

An official of Bombardier Aerospace said that while the company had not been aware of the fact that the Mesa Air Group was planning to file for bankruptcy protection, it has been holding discussions with Mesa over potential restructuring outside of filing for bankruptcy protection.

According to the official, the order from the Mesa Air Group for 10 Bombardier CRJ 700 regional jets had been deferred in 2008, for delivery until 2013. So far, this order exists in the Bombardier Aerospace’s backlog, and that remains unchanged, he added.

In a statement, Bombardier Aerospace said that, because of the fact that that the delivery of the 10 Bombardier CRJ 700 regional jets is many years away, the bankruptcy filing by the Mesa Air Group is unlikely to affect adversely the present production of regional jets. Bombardier has already planned to cut production of regional jets in 2010 on account of a decline in demand.

It may be noted that Bombardier Aerospace has had a relationship with the Mesa Air Group for the last about 30 years. In addition, Bombardier Aerospace is the Mesa Air Group’s second biggest creditor, after United States-based Wells Fargo Bank.

The liabilities of the Mesa Air Group amounted to US $869 million as on September 30, 2009, including $133 million that it owed to Bombardier Aerospace.

According to aviation analysts, Bombardier Aerospace is now counting on the United States-based carriers Delta Air Lines, US Airways and Northwest Airlines as customers. These airlines, too, have undergone bankruptcy protection in the past.