Bombardier Commercial Aircraft Update - November 2012

update Commercial Aircraft

Airshow China 2012 Edition

November 2012 | Volume 23 | Issue 5

The relationship strengthens

Bombardier and China

Inside: • China Express Airlines launches CRJ900 NextGen service • CSeries aircraft assembly begins • Aviation’s role in China’s future • Q400 NextGen aircraft’s suitability for China

Bombardier Commercial Aircraft provides optimized aircraft solutions for short-haul, medium-haul and longer-range markets.

Q400 NextGen: optimized short-haul solution

CRJ NextGen: optimized regional jet solution

CSeries: optimized single-aisle mainline solution

China Express Airlines CRJ900 NextGen airliner being prepared for the media event in Chongqing hosted by Bombardier. Inset: Wu Longjiang, Chief Financial Officer, China Express Airlines during the presentation.

CRJ Series aircraft well suited for development of China’s regional markets

C

hina Express Airlines, China’s pioneer and leader in regional aviation, made history this year by being the first to operate the CRJ900 NextGen aircraft in China. With the acceptance of its second aircraft in September 2012, the overall entry into service of the China Express CRJ900 NextGen regional jet has been “a delightful experience,” said Wu Longjiang, Chief Financial Officer, China Express Airlines, at a recent media event in Chongqing hosted by Bombardier. “Our CRJ900 NextGen regional jets are showing excellent dispatch reliability, low fuel burn and are the right size to optimize profitability in China’s tier two and tier three markets,” he added.

Bombardier Commercial Aircraft sees an important role for its 70-seat CRJ700 NextGen, 88-seat CRJ900 NextGen and 100-seat CRJ1000 NextGen regional jetliners as China continues to strengthen its regional aviation network.

The country’s current five-year plan calls for more regional airports, replacement of older aircraft with newer, more efficient models, and the faster growth of regional airlines to provide more service. Regional hubs could be developed in cities such as Harbin, Dalian, Tianjin, Chengdu, Chongquing, Kunming, Xi’an and Urumqui, to name a few possibilities.

Currently, 60 per cent of China’s commercial fleet is made up of aircraft larger than 150 seats, which are too large to connect smaller cities to provincial capitals. Current service levels are up to 10 times lower in these regions compared to top tier airport networks. As exemplified by China Express Airlines, CRJ NextGen aircraft economics allow airlines to profitably enter these smaller markets providing efficient service to a growing demand of business and leisure travelers.

Financing for start-up regional airlines in China can be arranged through CDB Leasing Co., ICBC Financial Leasing Co. Ltd., and AVIC International Leasing Co. Ltd. since all three leasing companies have signed Memoranda of Understanding (MoU) with Bombardier. Under the MoU, the leasing companies have agreed to offer advanced payment financing, delivery financing and leasing solutions for the Q-Series, CRJ Series and CSeries aircraft. China Express Airlines leases its CRJ900 NextGen aircraft from AVIC International Leasing Co., Ltd. “These MoU provide mutual benefits to Bombardier and the leasing companies since they address all parties’ objectives of providing optimized aircraft solutions to operators in China and elsewhere,” said Guy C. Hachey, President and Chief Operating Officer, Bombardier Aerospace.

November 2012 // 2

Bombardier Aerospace

&

China

Bombardier Aerospace and AVIC (China Aviation Industry Corporation) and its subsidiaries have had a strategic business relationship for more than 25 years.

In the 1980s, Xi’an Aircraft Corporation began to provide components for Bombardier’s CL-215 and its successor, the Bombardier 415 amphibious aerial firefighting/utility/coastal reconnaissance aircraft.

In the 1990s, SAC Commercial Aircraft Company Limited (SACC) began manufacturing doors for the Bombardier Q-Series family of turboprop airliners.

A major strengthening of the Bombardier/China relationship came in 2006 when Bombardier and SACC signed the largest subcontracting agreement in the Chinese aerospace industry to supply major parts for the then-new Q400 turboprop. Today, SACC provides the doors, forward, mid and aft fuselage sections, as well as the empennage and wire harnesses for the Q400 NextGen airliner.

“The packages supplied by SACC represent about 50 per cent of the overall Q400 NextGen airliner structure,” said Albert Li, General Manager and Head of Bombardier Aerospace China.

SACC’s sister company, Shenyang Aircraft Corporation (SAC) is contributing to Bombardier’s all-new CSeries airliner that will serve the 100- to 149-seat market segment. “Bombardier was the first original equipment manufacturer (OEM) to grant design authority on major supplied parts to China’s aviation industry, and SAC is now a major risk-sharing supplier on the new Bombardier CSeries aircraft,” said Brenton Chen, Vice-president, Operations, China.

Q400 NextGen aircraft on the production line.

CSeries, C919 aircraft collaboration

In March 2012, Bombardier Inc. and Commercial Aircraft Corporation of China Ltd. (COMAC) signed a definitive agreement covering program commonalities between the CSeries and C919 aircraft.

The four initiatives on which COMAC and Bombardier will be collaborating as part of this initial phase are commonality on: the cockpit humanmachine (crew) interfaces, the electrical system, the development of aluminum-lithium standards and specifications, and areas of customer services in terms of technical publications and co-location of teams. All four projects are expected to be completed by the end of 2012 and in conjunction with the C919 aircraft development schedule.

Both parties will continue exploring other possibilities for co-operation with regards to aircraft program commonalities, joint procurement, synergies in development and customer services, as well as collaboration on Bombardier and COMAC programs.

The CSeries aircraft cockpit represents the new state of the art.

3 // November 2012

CSeries

CSeries aircraft assembly underway

B

ombardier Aerospace has begun assembly of the first Flight Test Vehicle (FTV1) for the all-new CSeries airliner.

Bearing Serial Number 50001, FTV1 is located at the company’s manufacturing facility at Mirabel, Québec.

Bombardier Aerospace, Belfast manufactured the centre fuselage for FTV1, while the forward and aft fuselage sections, as well as the cockpit, were supplied by Bombardier’s St-Laurent, Québec facility. The rear barrel was supplied by Shenyang Aircraft Corporation (SAC), a subsidiary of the state-owned aviation industrial entity, China Aviation Industry Corporation (AVIC).

Bombardier has also received the first CSeries aircraft wings from Belfast and they have been mated to the test airframe that will be used during the Complete Airframe Static Test (CAST).

Bombardier Aerospace, Belfast is responsible for the design, manufacture and integration of the advanced composite wings for the CS100 and CS300 jets, including all flight control surfaces and high-lift systems.

The use of composites in such a large structure as the wing provides weight savings, but additional benefits to customers include fewer inspections – and therefore lower maintenance costs – thanks to the corrosion-resistant properties and fatigue strength of the composite material. The composite manufacturing process being employed at Bombardier Aerospace, Belfast also permits a high degree of accuracy and smoothness to minimize drag and reduce fuel burn.

As in the production of the CSeries aircraft’s wings, Bombardier has capitalized on its expertise in composites technology in the aircraft’s aft fuselage. For the aft fuselage and pressure dome, the company is utilizing Automated

Fibre Placement (AFP) techniques. Bombardier’s adaptation of AFP technology, which is also using robotics technology, has benefited from the largest collaborative aircraft structures demonstration project initiated by Canada’s National Research Council to advance AFP use in the aerospace industry.

The carbon-fibre wings for both the CS100 and CS300 aircraft have an approximate area of 1,209 square feet (112.3 m2) and a span of 115 feet 1 inch (35.1 m). While some of the internal parts of the wings of the two models are different, they have the same aerodynamic profile.

In other CSeries aircraft developments, testing of the avionics, electrical, flight control, fly-by-wire, hydraulic, landing gear and wiring systems for the CSeries aircraft, as well as virtual flights, continue at Mirabel on “Aircraft 0” (Aircraft Zero) – the on-the-ground Integrated Systems Test and Certification Rig (ISTCR).

“The CAST, FTV1 and ‘Aircraft 0’ are all key elements in the testing and development of the CSeries aircraft and we are delighted with the progress on each of these three test programs,” said Rob Dewar, Vice-president and General Manager, CSeries, Bombardier Commercial Aircraft. “‘Aircraft 0’ is permitting us to validate the CSeries aircraft’s systems in an efficient, on-the-ground setting that allows us to work seven days a week, 24 hours a day. Our findings will allow us to optimize the time spent in the flight test program. The integrated systems tests on ‘Aircraft 0’ are designed to mitigate risks and provide the necessary reliability before first flight. To date, tests have shown no unexpected results and all is going as planned.”

CSeries aircraft wing prior to being mated to the CAST article.

September 2012 // 4

Update

First CSeries Flight Test Vehicle (FTV1).

How the CSeries aircraft can help China Bombardier Commercial Aircraft’s new advanced-technology CSeries single-aisle mainline jet can play an important role in the expansion and improvement of China’s aviation infrastructure.

“The majority of flights in China have between 110 and 140 passengers, and more than 60 per cent of single-aisle aircraft flights leave the gate with between 80 and 130 passengers,” said Andy Solem, Vice-president, Sales, China and North Asia, Bombardier Commercial Aircraft. “That’s exactly where the CSeries family of aircraft, with 110 to 145 seats, fits in. It is the right size for these circumstances and drives higher load factors and frequencies to stimulate the market.”

High-elevation destinations in China are witnessing growth rates exceeding 15 per cent. These hot and high markets require efficient performance from appropriately-sized aircraft.

The CSeries aircraft’s high rate of climb and other performance capabilities allow it to serve airports in China’s Alps.

5 // November 2012

Wherever the CSeries airliner flies, it will do so with a considerable reduction in fuel burn. The latest generation of system technology, state-of-the-art aerodynamics, a lighter structure due to the extensive use of advanced materials, along with the game-changing Pratt & Whitney engine, the PurePower® PW1500G, lead to a more than 20 per cent fuel burn advantage.

The CSeries aircraft’s technology will also drive down direct maintenance costs by up to 28 per cent compared to current in-production aircraft.

Extensive use of composites also helps to lower the weight of the CSeries aircraft, which is 12,000 pounds (5,443 kg) lighter than its closest competitors.

“The CSeries aircraft is unique in that it is a ‘clean sheet’ design,” said Mr. Solem. “Other offerings are either growth versions, or shrunken versions, of existing aircraft. The CSeries aircraft is all new.”

The Q400 NextGen aircraft and China:

a good fit

China’s aviation industry supports a five-year plan to grow and strengthen its regional aviation structure but there is acknowledgment that the country will require more regional airports and more regional aircraft. The need for immediately available, fast, reliable, economical, comfortable, high-performance aircraft with solid environmental credentials fits perfectly with Bombardier’s offering.

“Our Bombardier Q400 NextGen aircraft fulfills these requirements better than any other turboprop airliner,” said Marcel Grauer, Regional Marketing Manager – China and North Asia, Bombardier Commercial Aircraft. “Since entering revenue service in 2000, the Q400/Q400 NextGen aircraft has set the standard for airline turboprops.”

He said the average stage length of the Q400 aircraft route network proposed to China by Bombardier is 300 nm (557 km). That is where the 360-knot (667 km/h) Q400 NextGen turboprop performs as well as a jet aircraft but at a far lower cost. A Q400 NextGen aircraft will cover that distance in 61 minutes; a conventional turboprop will take 77 minutes, or 26 per cent more.

On a typical regional route such as Harbin-Heihe, the Q400 NextGen aircraft’s speed would permit an airline to add one extra flight per day, or 350 extra revenue-generating flights per year.

Mr. Grauer suggested that China needs aircraft with hot and high performance to explore rich tourist resources in high elevation areas, develop the western part of China, increase mobility and responsiveness towards unexpected incidents in high elevation areas, and cover areas where ground transportation can be difficult.

As an example, Ethiopian Airlines in Africa faces the same environmental challenges and its Chairman, Tewolde Gebremariam said, “Of great importance to us is the aircraft’s high rate of climb, single-engine service ceiling and higher take-off weight, thus greater payload when operating from our high-altitude, hot-weather airports.”

The Schedule Completion Rate (SCR) of the worldwide Q400 NextGen airliner fleet is 99.6 per cent, meaning that only four flights out of 1,000 are cancelled.

The flexibility of the Q400 NextGen airliner’s cabin means that the aircraft is available in single-class or dualclass seating configurations, as well as with one or two lavatories. Galleys may be outfitted for the service of cold meals only, or for both hot and cold meals, and a drop-down oxygen system is available as an optional feature.

Q400 aircraft have also been outfitted for forest fire fighting and in executive/VIP configurations.

“We look forward to continuing our many discussions with China’s airlines to promote the many benefits to be received by operating the Q400 NextGen airliner,” said Mr. Grauer.

As of October 31, 2012, firm orders for Q400 and Q400 NextGen airliners totaled 460 aircraft and delivered aircraft were in service with more than 40 operators on six continents. These popular, technologically advanced aircraft have transported more than 243 million passengers.

The Q400 NextGen airliner appeared in China earlier in 2012 during its globe-circling demonstration tour that also took it to Latin America, Africa, Russia and CIS countries.

November 2012 // 6

Bombardier Commercial Aircraft team in China Bombardier Aerospace opened a new office in Shanghai in April 2012 to support its growing activities in China.

Bombardier Commercial Aircraft has since positioned a Sales and Marketing team in the Shanghai office in anticipation of the growth of the China commercial aircraft market which is now the world’s second largest.

In addition to Sales and Marketing staff, Bombardier Commercial Aircraft has also positioned Public Relations and Events Coordination staff in China. The China Sales and Marketing team operates under the leadership of Andy Solem, Vice-president, Sales, China and North Asia, Bombardier Commercial Aircraft.

“We have a superb range of products, a talented workforce and a solid business plan for global expansion and success,” said Mr. Solem. “In terms of China, it is my intention to make further strides in what is already a

strong long-term relationship with one of the world’s key aviation markets.”

The Shanghai office is also home to the Bombardier Commercial Aircraft teams working with the Commercial Aircraft Corporation of China Ltd. (COMAC) and Bombardier Aerospace’s Supply Chain organization in China.

A Bombardier Commercial Aircraft team in Shenyang is dedicated to the CSeries and Q400 NextGen aircraft manufacturing programs.

In addition, to ensure customers in China have access to world-class service as close as possible to their operational bases, Bombardier has established parts depots in Beijing and Hong Kong, as well a regional support office in Hong Kong.

Celebrating the opening of the Shanghai office are, from left, Jianwei Zhang, President, Bombardier China; Guy C. Hachey, President and Chief Operating Officer, Bombardier Aerospace; Albert K. Li, General Manager and Head of Bombardier Aerospace, China; and Andy Solem, Vice-president, Sales, China and North Asia, Bombardier Commercial Aircraft.

Parts price reductions

Bombardier Customer Services has reduced the price of more than 2,000 new commercial aircraft parts, including more than 200 “high-impact” parts identified as having a significant bearing on its customers’ direct maintenance costs.

The new pricing is based on an in-depth analysis of several market factors and includes both proprietary and nonproprietary parts.

“Along with the price promotion offered earlier in 2012, these reductions reflect our increased focus on establishing prices that are consistent with the value of doing business with Bombardier,” said Diane De Souza, Vicepresident, Parts Services, Bombardier Commercial Aircraft.

Diane De Souza

Bombardier aircraft in greater China and Mongolia Currently, more than 100 commercial and business aircraft manufactured by Bombardier Aerospace are in service, or on firm order, in Greater China and Mongolia.

Bombardier Commercial Aircraft operators are: Shandong Airlines: • five CRJ200 • two CRJ700 China Express Airlines: • five CRJ200 • six CRJ900 hina Eastern - Yunnan Airlines: C • five CRJ200 Shanghai Airlines: • three CRJ200 hina United Airlines: C • five CRJ700 UNI Airlines: • eight Q300 Eznis: • one Q400 The fleet of Bombardier business aircraft in China includes Global, Challenger and Learjet aircraft.

November 2012 // 8

’s Aviation role in China’s future

AIRPORT CONGESTION AND EXPANSION PLAN China (PRC)

1 4

2 1 1

11

2 2 2

2

3

1

2

2

4 2

1

3

3

3

2 1

3

3 2

2

3

7 2

Existing airports at or above optimum capacity

40

1

3

1

3

3

1 1

9 8

3 3

6

5

China’s scheduled airports for expansion/construction

DEMAND DISTRIBUTION

BY SEAT SEGMENT, CHINA, 2012-2031

1%

Total: 2,220 Units

36% 20- to 59-seat

63%

60- to 99-seat 100- to 149-seat

Source: Bombardier Commercial Aircraft Market Forecast 2012-2031.

9 // November 2012

“China’s need for domestic transportation is central to its economic growth plans and aviation is expected to play a central role.”

That’s the conclusion reached by Bombardier’s Commercial Aircraft Market Forecast for the period 2012-2031.

China’s current five-year strategic plan seeks to have more than 80 per cent of its population within 100 km or 1.5 hours of air transportation, the Forecast states. Such a feat would provide air transportation to 96 per cent of its Gross Domestic Product (GDP) base.

Airports and air traffic control system capacity are major brakes on the growth of commercial aviation in China, the Forecast notes. In addition, current commercial airspace limitations, aircrew shortages and other factors have favored the use (and purchase) of larger jets resulting in congested airspace around China’s largest urban centres.

The Forecast states, “Accordingly, China will need to build aggressively and equip a significant number of new airports – some to relieve air traffic congestion in heavily populated and traveled areas – and still more to develop and extend economic and social links to more remote parts of the country.

“China is therefore expected to require a significant number of 60- to 90seat regional aircraft to meet this demand, as well as the pilots to fly them, technicians to maintain them and an air traffic control system with which to operate them safely,” notes the Forecast.

China is expected to take delivery of 2,220 new commercial aircraft during the Forecast period. Aircraft with 100 to 149 seats are expected to comprise 63 per cent of those deliveries, followed by 60- to 99-seat aircraft with 36 per cent, and aircraft with 20 to 59 seats at one per cent.

CSeries demonstrators at Zhuhai

cseries.com

crjnextgen.com

q400nextgen.com

Q-Series/Dash 8 Facts and Figures CRJ Series Facts and Figures Status (September 30, 2012) Delivered Series 100 299 Series 200 105 Series 300 267 Series 400 416 Program total 1,087

Total 299 105 267 460 1,131

Dash 8-100/Q200/Q300 Fleet statistics, July 2012 Average flight time (mins.)

51 Average annual utilization (hours/cycles) 1,764/2,087 Highest annual utilization (hours/cycles) 2.834/4,839 Fleet total hours 21,361,895 Fleet total cycles 25,840,053 Schedule completion rate 99.5% 12-mo. Avg. Q400 Fleet statistics, August 2012 Average flight time (mins.)

58 Average annual utilization (hours/cycles) 2,180/2,258 Highest annual utilization (hours/cycles) 3,251/3,280 Fleet total hours 3,848,197 Fleet total cycles 4,175,492 Schedule completion rate 99.6% 12-mo. Avg.

CSeries Facts and Figures Status (September 30, 2012) Delivered Total CS100 0 66 CS300 0 72 Program total 0 138 The CSeries aircraft program has booked firm orders for 138 aircraft and committments (including options, purchase rights, conditional orders and letters of intent) for another 214.

Status (September 30, 2012) Delivered Total CRJ100 226 226 CRJ200 709 709 CRJ440 86 86 CRJ700 316 324 CRJ705 16 16 CRJ900 259 274 CRJ1000 23 67 Challenger 800 33 33 Program total 1,668 1,735 CRJ100/200 Fleet statistics, July 2012* Average flight time (hrs.)

Average annual utilization (hours/cycles) Highest annual utilization (hours/cycles) Fleet total hours Fleet total cycles Schedule completion rate

1.05 2,172/2,076 3,569/3,415 25,302,135 22,250.919 99.7% 12-mo. Avg.

CRJ700/705/900 Fleet statistics, August 2012 Average flight time (hrs.)

1.41 Average annual utilization (hours/cycles) 2,643/1,880 Highest annual utilization (hours/cycles) 3,339/2,569 Fleet total hours 9,307,964 Fleet total cycles 6,795,975 Schedule completion rate 99.7% 12-mo. Avg. CRJ1000 Fleet statistics, August 2012 Average flight time (hrs.)

Average annual utilization (hours/cycles) Fleet total hours Fleet total cycles Schedule completion rate *Does not include operators of corporate aircraft.

1.08 2,269/2,106 62,060 56,794 99.8% 12-mo. Avg. Utilization based on schedule data.

Bombardier Commercial Aircraft is pubished by: Bombardier Commercial Aircraft 123 Garratt Boulevard, Toronto, Ontario Canada M3K 1Y5 Tel: +1-416-375-4027 // Fax: +1-416-375-4540

President: Michele (Mike) Arcamone Senior Vice-president, Commercial: Chet Fuller Vice-president, Marketing: Philippe Poutissou Vice-president, Customer Services and Support: Todd Young

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www.aero.bombardier.com Information, technical data and performance figures in this publication are subject to change without notice. This publication does not intend to convey any guarantees or warranties. Any guarantees or warranties on any subject are extended to customers only as may be provided in their purchase agreements. Articles in Commercial Aircraft Update may be reproduced without permission, providing the acknowledgement is given to Bombardier Commercial Aircraft Update.

Copyright Š Bombardier Inc. 2012 *Bombardier, Bombardier 415, Challenger, CL-215, CRJ, CRJ100, CRJ200, CRJ700, CRJ705, CRJ900, CRJ1000, CS100, CS300, CSeries, Dash 8, Global, Learjeat, NextGen, Q200, Q300, Q400 and Q-Series are trademarks of Bombardier Inc. or its subsidiaries.

Bombardier Aerospace will showcase its CSeries flight deck and cabin demonstrators at the 2012 China International Aviation & Aerospace Exposition (Airshow China) in Zhuhai, November 13-18.

The demonstrators will be housed at the Bombardier Aerospace display in Hall 1 at D3-6.

Thousands of visitors have explored the state-of-the art demonstrators at the 2012 Farnborough Air Show in July 2012, and later at airBaltic’s headquarters in Riga, Latvia and at Augsburg Airways at Munich Airport, Germany. Potential customers who have seen the demonstrators get a better sense and feel for the newest standard in passenger comfort and the most technically advanced flight deck.

Bombardier will also feature its 68- to 80-seat Q400 NextGen turboprop airliner, and 70- to 100-seat family of CRJ NextGen regional jetliners in Zhuhai.