Newspaper article The Canadian Press

Bombardier Not Willing to Cede Further Ground to Regional Rivalry with Embraer

Newspaper article The Canadian Press

Bombardier Not Willing to Cede Further Ground to Regional Rivalry with Embraer

Article excerpt

Embraer-Bombardier battle heating up

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MONTREAL - Bombardier is unwilling to cede ground to Embraer despite an analyst's forecast that the Brazilian rival is positioned to further grow its share of the regional jet market in the coming years.

"We have confidence in our products," said Marianella Delabarrera, a spokeswoman for the plane- and train-maker on Monday.

"The way we see it, the CRJ is considered the benchmark in regional jet efficiency in the category," she said, pointing to lower fuel burn, emissions, noise levels and maintenance costs.

Delabarrera said the Montreal-based manufacturer always anticipated a competitive response to its aircraft and is pursuing product enhancements to attract additional sales. Bombardier is making strides in new markets such as Africa and Indonesia, along with Russia, where it has a large base of used planes in operation, she added.

Embraer has won the majority of recent U.S. regional jet orders -- US$4.9 billion since late 2012, compared with just US$1.9 billion for Bombardier. But Bombardier insists it will win some of the remaining contracts that are in play.

Derek Spronck, an associate transportation analyst at RBC Capital Markets, anticipates that Embraer's market share between 2013 and 2015 will increase to 63 per cent from the aggregate 54 per cent it achieved between 2001 and 2012.

"Whether by thoughtful decision-making or by second-mover advantage, Embraer has effectively positioned its product lineup against a competitive, landscape," he wrote in a report issued Monday.

Embraer's backlog now is at a point where Spronck anticipates a 17 per cent ramp up in deliveries in 2014, adding US$425 million in extra revenue.

Bombardier (TSX:BBD.B) has delivered nearly 1,700 aircraft and has 91 planes in its backlog as of June 30, or 55 months of production. The company used to dominate the regional jet market but has seen its leadership dwindle since Embraer introduced its E-Jet family in 2003.

Embraer, the world's fourth-largest aircraft manufacturer behind Bombardier, delivered 76 per cent of the world's regional jets last year, up from 29 per cent in 2003. …

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