Monday, November 2, 2015

Icelandair eyes capacity growth of 18 percent in 2016

Icelandair plans to increase capacity by 18 percent next year by luring customers to a network of niche North American cities and tempting them with onboard wifi services, helping it compete on trans-Atlantic routes.

Icelandair flies between European and U.S. cities via its Iceland hub, which means it can use smaller, cheaper planes than other airlines on trans-Atlantic routes. It estimates it has a 2 percent share of the North Atlantic market.

"We are planning next year to grow 18 percent in terms of available seat kilometres," said Helgi Mar Bjorgvinsson, senior vice president of marketing & sales, referring to a standard measure of an airline's passenger carrying capacity.

That compares with an average annual growth rate of 15 percent over the last five years.

The airline is facing competition on Europe to North America routes from budget airlines such as Wow Air, a rival Iceland-based airline that also uses the Reykjavik stop-off model, and Norwegian, which offers low-cost direct flights.

Wow Air said on Monday it would add new routes between Reykjavík and Los Angeles and San Francisco in 2016.

Also from next year, Canada's WestJet will start flying direct routes from London Gatwick to Toronto and other cities at budget prices.

In an interview on Monday, Bjorgvinsson said flying to destinations like Edmonton, Denver, Seattle, Portland and Anchorage gave the airline access to niche markets that have fairly few direct flights to Europe.

Icelandair, which has a market capitalization of 171 billion Icelandic crowns ($1.3 billion), also competes through its hybrid low-cost but-full service offering, said Bjorgvinsson.

Unlike on some budget airlines, passengers do not have to pay to check in their bag, and from the end of this year, the whole fleet will be wifi-enabled, he added.


 - Source: http://www.reuters.com

Liberal opposition to jets at Billy Bishop airport a blow to Bombardier



The incoming Trudeau government, already facing a tough decision on whether to offer a $1-billion (U.S.) bailout to Bombardier, says it’s standing by a different political pledge that will end up hurting the Montreal aircraft maker and its troubled C Series plane.

The Liberals, who take office in Ottawa on Wednesday, confirmed Monday that they remain opposed to allowing jets at Toronto’s Billy Bishop airport – which would kill an order worth more than $2-billion to Bombardier.

Porter Airlines Inc. is prepared to buy as many as 30 of Bombardier’s C Series planes, but only if the runway at Billy Bishop Toronto City Airport is extended. The federal government is one of three parties that will rule on whether that extension can go ahead.

Authorization for runway extensions necessary to accommodate jets would require renegotiating a tripartite agreement between Ottawa, Ports Toronto and the City of Toronto.

Asked to clarify the Liberal position Monday, Trudeau spokesman Daniel Lauzon provided a copy of a June 4, 2015, letter sent to Toronto Mayor John Tory and city council, signed by Toronto-area Liberal MPs and the chair of the Ontario Liberal caucus, that pledged never to do that.

“We have … pledged not to reopen the Tripartite Agreement,” the letter said. “The Liberal Party’s policies on the waterfront are as clear as they are forward looking,” the MPs wrote.

This Toronto pledge leaves the Liberals in an awkward position. Quebec’s Economy Minister Jacques Daoust on Friday said he will ask Ottawa to match a $1-billion lifeline for Bombardier when the Liberals take office Nov. 4.

A request to join a bailout package and the expansion of Toronto’s downtown airport are theoretically separate discussions, but a government that kicks in $1-billion to support an airplane program that has struggled to land orders will find it challenging to kill the Billy Bishop expansion plan at the same time and cause the cancellation of a major order.

The Liberal pledge Monday backs up a promise made by Adam Vaughan, who, while a Toronto councillor, MP in the previous parliament and during a successful re-election campaign, opposed the Porter proposal. Mr. Vaughan was re-elected in the central Toronto riding that includes the airport.

“The jet issue. We’ve made a promise. We will keep that promise. No jets on the waterfront,” he said during his victory speech on Oct. 19.

That pledge was made before the Quebec government agreed last week to inject $1-billion into Bombardier and take a 49.5-per-cent ownership in the C Series program.

It was also made before Mr. Daoust said he would be on the phone to the new federal industry minister half an hour after that person is appointed.

“If the federal government comes in, the notion of risk completely changes,” Mr. Daoust told Bloomberg last week.

Porter wants the three entities – the federal government, the City of Toronto and Ports Toronto – that control the island airport to agree to 168-metre extensions of both ends of the runway to allow the C Series to take off and land. Porter would offer flights from Toronto to Western Canada, the United States and the Caribbean.

Porter’s order for 12 planes and options on 18 more is worth $2.3-billion at 2013 list prices, but is conditional on approval of the expansion.

The Liberal position on the Billy Bishop expansion and helping Bombardier financially is being closely watched in Quebec, where the party gained major ground in the federal election last month.

“It starts with Justin Trudeau,” said aviation consultant Robert Kokonis, president of AirTrav Inc. “Does he want to invest $1-billion? They went from extinction in [Quebec] to 40 seats. He’s talking about infrastructure, talking about job creation,” Mr. Kokonis said.

Bombardier has 243 firm orders for the C Series, which is two years behind the scheduled date of delivery to its first customer and more than $2-billion (Canadian) over the initial budget of $3.4-billion.

Porter spokesman Brad Cicero said Toronto City Council voted 44-0 to undertake a review of the airline’s proposal, including participation by all three members of the tripartite agreement that governs the airport.

“If after the full review is complete, and city council determines that it would like to proceed with the proposal, we believe that the federal government should consider the wishes of the people of Toronto when evaluating the proposal,” Mr. Cicero said.

- Story and comments: http://www.theglobeandmail.com

Pilot Michael Alger: 25 missions with Angel Flight

Michael Alger, 45, has racked up 25 missions for Angel Flight Southeast and is looking forward to more.




UMATILLA — Pilot Michael Alger flies with a purpose.

Alger, 45, has been flying missions through Angel Flight Southeast, a Leesburg nonprofit that helps patients get to medical care when it's not available in their area. He has flown 25 missions since December 2012.

"It's the best thing I've done with my pilot's license," he said. "I get a lot out of it. It's pretty significant to fly with a purpose, not just as a hobby for myself."

Alger, born in Eustis and raised in Umatilla, earned his pilot's license in 2001 in the midst of his career as a paramedic. His late mother supported his quest to fly and was his first passenger. In 2011, he bought a single-engine Rockwell Commander 112TC with a partner.

"That's when I decided I could do Angel Flight," he said.

Alger recalled his first mission. It was cancelled two days before the flight, but another mission still needed a pilot: A woman needed a lift from Leesburg to Okeechobee. Alger volunteered for the flight.

"I met the lady. Her name was Joan — it's my mother's first name," he said. "That was a very special moment for me."

Alger said Angel Flight does a lot for him on many levels.

"When you see someone who is dealing with something, it makes you grateful for your own life and not having to struggle with things that others have to," he said. "It helps you to count your blessings."

Alger said he always has wanted to help others.

After he graduated from Umatilla High School, he earned a degree in paramedic technology at Tallahassee Community College. In 1990, he returned to Lake, landed a job with Lake EMS and worked there for 12 years.

While a paramedic, he earned a degree in firefighting from Lake Technical Center. He switched careers to become a firefighter-paramedic with the Mount Dora Fire Department in 2003 and is still there today.

"I guess it's in my blood," he said of his service-orientated career. "It's very rewarding, very challenging at times."

Alger said his grandfather was a West Point graduate and had at least a 40-year military career. His brother served in the Air Force, and his late father was a navigator on a B-17 bomber in World War II.

"Lots of military in my family, a lot of military influence," he said. "I was going to join the military but decided to go the civilian route."

Alger said his father shared stories of his flights in the Army Air Corps and took flying lessons after the war. Father and son went to fly-ins and airshows often. A family friend, State Sen. Alan Hays, and Alger got a ride in it several times around the age of 13.

"I was hooked at that point," he said of flying. "I always kind of had it in my head that it would be something I'd like to do."

Alger spends his free time watching and going to Florida State football games. He's also working on the old family home in Umatilla. He has lived there with his five-year-old English bulldog Hannah, since 2010.

"It's an old house," he said. "There's a lot of stuff to be done with that. I'm chipping away at whatever I can."

At the moment, Alger is waiting to hear of his next mission with Angel Flight Southeast.

"At the end of the day when I do a flight, I think 'I'm the luckiest guy in the world. I just flew my airplane and helped someone in the process.' There's nothing better than that."

Angel Flight Southeast fundraiser

What: The 19th Annual Golf Tournament

When: Nov. 11

Where: Arlington Ridge Golf Club, 4463 Arlington Ridge Blvd., Leesburg

Time: 7:30 a.m. to 3 p.m.

Call 352-326-0761 to support the event by purchasing a foursome or providing a sponsorship.

- Source:  http://www.orlandosentinel.com

Changes Coming to Security Checkpoints at Minneapolis-St. Paul International (KMSP), Minnesota



You may notice some changes the next time you board a flight at Minneapolis-St. Paul International Airport.

The most noticeable ones are planned for security checkpoints in early 2016. Other less noticeable changes have already happened, partially due to a report—first published by ABC News in June—which found that Transportation Security Administration screeners missed 95 percent of the fake bombs and weapons that a testing team tried to sneak through the system.

"TSA in the past, recent past, likely was a little too focused on moving passengers through the line," TSA Federal Security Director for Minnesota Cliff Van Leuven told a Metropolitan Airports Commission committee at a Monday meeting.

Van Leuven detailed changes already implemented by the TSA, including an additional eight hours of training for every TSA agent and making sure no one goes through the PreCheck line without being pre-approved.

"We've got to detect the threat first and foremost," Van Leuven told 5 EYEWITNESS NEWS after the meeting.

He said the changes could cause the airport's security lines to move a little more slowly, at least until some other planned changes go into effect.

Starting early next year, there will be two main security checkpoints in Terminal 1. The first is an already-existing six-lane checkpoint at the South end of the terminal. The second will be a brand-new, 10-lane checkpoint at the north end of the terminal, where restaurant Hot Dish was once located.

"I think it's going to take away some of that confusion as people come into the lobby on busy mornings or busy evenings and they can't figure out exactly where to go," Van Leuven said.

In the meantime, if that wait at security is a little longer than you'd like, now you know why. The TSA has both safety and speed in mind, but they say safety has to come first.

Story and video:  http://kstp.com

Transportation Security Administration finds record number of guns in carry-on bags


CHICAGO (WLS) -- Guns and airplanes don't mix, but every day at airports in Chicago and across the country, travelers try to bring guns through security.

Transportation Security Administration officers found a record 2,200 guns in carry-on baggage last year. Now, the number of confiscated carry-on guns made this past week a record week; Sixty-eight guns were found as travelers bags moved through airport X-ray scanners. They are among firearms, explosives, knives and other weapons that pose an increasing risk to air travelers.

"'I forgot' or 'didn't know it was in my bag' - that's the most two common excuses," said Kevin McCarthy, TSA.

Regardless of the reason, it is illegal to try to carry a gun onto a commercial aircraft. Nevertheless, this is the weekly haul for TSA. Pistols and revolvers - the majority of them loaded - and some with a bullet in the chamber ready to be fired.

The record 68 firearms seized by TSA last week has put the agency on a course to far exceed last year's record. The data steadily climbing year-to-year, even as more attention is focused on the fact that you can't bring guns on planes - and it isn't just guns.

Explosives - real and real-looking - are also found by federal security officers inside the carry-on bags of common travelers, along with knives and concealed weapons of all kinds. A stun gun cane was found on a traveler at O'Hare in mid-October.

These potential threats at 35,000 feet come as the aviation industry wrestles with questions about what actually happened to a Russian jetliner on Saturday. Investigators are picking through the wreckage of the plane that crashed from cruising altitude over Egypt, without a mayday call.

ISIS has claimed responsibility and U.S. counterterror officials seem to be leaning toward some intentional act. But so far, it isn't clear whether the Russian plane was doomed by an on-board bomb, or something else.

"We could say perhaps it was a bomb that made the airplane come apart. Or perhaps it was some unknown structural failure where the airplane just came apart. But right now we don't have any evidence that leads us one way or another," said Col. Stephen Ganyard, ABC News aviation consultant.

Metrojet Airline officials say technical faults or human errors couldn't have caused their Flight 9268 to crash. Russian officials say it's too soon to tell what caused the jet to plunge, killing all 224 people on board. But if it ends up intentional, authorities will be looking at the airport process in Egypt for baggage and passengers.

Story and video:  http://abc7chicago.com

No news on Lansing-to-DC route as deadline nears



DEWITT TWP. - It's been a month since daily flights to Washington D.C. from Capital Region International Airport ceased. It could be two more months before one of two competing airlines gets federal approval to take over the defunct route, far beyond the Nov. 5 decision the airport had originally hoped for.

American Airlines announced its bid for the D.C. route in August. Delta Air Lines threw its cap in the bidding pool in September, delaying federal approval.

In the meantime, the airport is suffering.

“We’re seeing drops in revenue,” said Chris Holman, a member of the Capital Region Airport Authority board. “In our business, we make our money by moving people in and out of the airport.”

It doesn’t help that the route opened up a month earlier than expected, after Sun Country Airlines terminated its lease with the airport in October. Combined with the loss of Allegiant Airlines in January, airport officials are anticipating a $1.2 million budget shortfall for the 2015-2016 fiscal year. The airport expects the U.S. Department of Transportation and Federal Aviation Administration to approve the D.C. route by the end of the year.

Three airlines remain at the airport: Delta, United Airlines and Apple Vacations. Delta offers daily non-stop flights to Detroit and Minneapolis, while United provides daily non-stop flights to Chicago. Apple Vacations offers seasonal flights to Cancun, Mexico from December to April.

To make up for the loss in revenue, the airport has hiked user fees for the remaining airlines to generate an additional roughly $400,000 while taking roughly $750,000 from its reserves to break even, said Robert Selig, airport president and CEO.

Each day the airport goes without the D.C. route, it loses roughly $1,000 in landing fees, which cover operating costs.

That doesn’t include the $4.50 passenger facility charge the airport collects from each ticket sold, which goes toward capital improvements. When airplanes carry between 50 and 70 passengers in a flight each day, those missed flights add up quickly, especially for an airport that has seen declines in the number of passengers over the years.

The airport reached its peak traffic in 1997 with 720,365 total passengers. By 2009, the first full year of the recession, those numbers had plummeted to 265,967 but steadily crept back up to 418,850 in 2013. In 2014, the number dipped again to 376,912 passengers.

As of September, the airport’s number of passengers totaled 257,440.

“If a customer leaves, the longer they are gone, the less apt they to come back,” Holman said.

When American Airlines announced its bid in August, it received an outpouring of support that included 1,200 letters and emails from government officials, business owners, special interest groups and residents in the region.

Now that the original deadline to fill the route won’t be met, government officials are writing more letters to pressure USDOT and the FAA to approve the bid quickly. Republican Congressmen Mike Bishop, Tim Walberg and John Moolenaar sent one last week.

“With Sun Country no longer servicing this route, a quick decision is crucial to ensure a lapse in service is as short as possible,” they wrote in an Oct. 28 letter addressed to Secretary of Transportation Anthony Foxx.

The D.C. route would generate $16 million in economic impact annually for the region, according to a study by Trillion Aviation Inc., an airport consulting firm.

Delta’s bid for the route made for a longer USDOT and FAA approval process, requiring the agencies to hear lengthy testimonies from both companies.

“Delta would be the superior public interest choice,” Delta officials wrote in letter dated Sept. 15 to the FAA. “Unfortunately, due to its limited slot holdings, Delta is already sub-optimized at DCA (the D.C. airport) and cannot commence Lansing services without unacceptable harm to its current DCA network … Delta is in much greater need of exemption authority than American if it is to provide Lansing with nonstop service.”

American challenged Delta, claiming the company does not have Lansing’s best interests in mind.

“Only after American applied to preserve LAN-DCA service did Delta feign interest in protecting service to the nation’s capital for Mid-Michigan travelers, by filing a copy-cat application that proposed nearly identical slot times and equipment as American,” wrote Howard Kass, vice president of Regulatory Affairs for American Airlines in a response letter to the FAA dated Sept. 24. “The FAA should not permit Delta to effectively re-start this proceeding and prolong the evaluation of American’s exemption request for its own commercial benefit.”

JetBlue Airways also filed an objection to both the airlines’ bids, mainly to Delta’s.

”Delta, like American, has a large portfolio of historic DCA slots with which it could start DCA-Lansing service at any time,” JetBlue officials wrote in a letter dated Oct. 19 to the FAA. “In fact, Northwest Airlines operated DCA-Lansing shortly before its merger with Delta in 2008. After its merger with Northwest, Delta abandoned many DCA slots that were previously used for service to communities such as Lansing, but nonetheless Delta remains the second largest slot holder at DCA after American with around 50 daily departures.”

The airport has openly backed American Airlines because it is promising to offer more than Delta. American Airlines would offer a 7 a.m. flight from Lansing to Washington, D.C. and a 5:30 p.m. return flight daily, which would make it easier for lobbyists and business leaders to set up meetings and return home at a reasonable time, Holman said.

American Airlines would also offer three daily flights from Lansing to Chicago's O’Hare International Airport starting in early 2016. It would offer 33 connecting flights to states along the East Coast from Washington, D.C., and 115 connections worldwide from Chicago.

Delta also would offer one daily round-trip flight to D.C., but isn't proposing other connecting flights.

“We think American Airlines coming in will fit us best,” Holman said. “But now we’re losing passengers, losing fees, this hurts.”

Story and comments:  http://www.lansingstatejournal.com

Movassaghi, four others, appointed to new terminal committee: Lafayette Regional Airport (KLFT), Louisiana

 


A five-person committee has been appointed by the Lafayette Airport Commission to evaluate Statements of Qualifications for architecture and engineering firms interested in projects at the airport, including the building of the new terminal.  A request for qualifications will be issued in the near future and the committee will convene to review the RFQ before the airport commission approves it, according to a statement sent by the commission on Monday.

The committee consists of Lafayette Airport Commissioners Paul A. Guilbeau and Paul Segura, airport executive director Steven Picou, airport airfield manager Anthony Hebert and Kam Movassaghi of Lafayette-based Engineering and Management Consulting.

The committee's appointment comes weeks before the close of a 1 cent sales tax approved by voters last year. The tax began in April and ends on November 30.  An estimated $30 million is expected to be collected from the tax toward the new terminal.

“Lafayette Airport Commission policy requires one hired independent person who must be an engineer, airport planner or professional knowledgeable of the services required,” says Lafayette Airport Commission Chairman Matt Cruse in a statement. “Mr. Movassaghi certainly fits that description and the commission is pleased he has accepted the position. He has a keen interest in the airport and the things the commission is trying to accomplish.  His knowledge and years of experience will be invaluable as we move forward with the new terminal and other upcoming projects.”

Movassaghi recently retired as president of C.H. Fenstermaker & Associates and has served as secretary of the Louisiana Department of Transportation and Development, head of the Department of Civil Engineering at the University of Louisiana Lafayette.  He has held several engineering positions both in the United States and overseas and he has received 14 awards and honors related to engineering since 1992.

“I am very interested in being part of the process of evaluating Architecture and Engineering firms for Lafayette Regional Airport. I consider the opportunity a privilege and am happy to do all I can to make these projects successful,” says Movassaghi.

- Source:  http://www.theadvertiser.com

General aviation terminal nearing completion at Blackwell Field Airport (71J) Ozark, Dale County, Alabama

Blackwell Field Airport Director Stephanie Blankenship and Ozark Mayor Billy Blackwell pose for a photo with plans for the airport's new terminal. 

 

OZARK—First impressions haven’t always been the best ones at Blackwell Field Airport in Ozark.

But 15 years after the initial plans to improve the airport grounds and make it visible from U.S. 231, the airport’s facelift is finally underway.

Gencon Associates of Dothan has begun work on a general aviation terminal for business use at the airport that is expected to be completed by this coming summer. Stephanie Blankenship, the airport’s director of Aviation Services, said the terminal is expected to have a reception area, lobby and large and small conference room equipped with video conferencing and smart board capabilities. A kitchen and break area, pilot’s lounge for flight planning, as well as storage and the airport director’s office are also within the plans.

The outside of the terminal is intentionally similar to the exterior of the Alabama Aviation Center nearby.

Ozark Mayor Billy Blackwell said the terminal will be available for meetings and community events.

Blankenship said the total project cost will be $3,615,843, most of which is funding from the Federal Aviation Administration. The City of Ozark matched the funds with $822,767, and the Alabama Department of Transportation contributed $337,013.

Blankenship said the recent improvements took place after analyzing what the airport’s strengths were and where there are areas for improvement.

“Overwhelmingly our areas of improvements related to the services we offered to our pilots and the flying public,” she said.

Blankenship said a taxiway with lighting, as well as site work for the aircraft parking apron and vehicle parking lot, has already been completed at the airport.

The paving of the entranceway to the terminal from U.S. 231 and the paving of the aircraft parking apron and vehicle parking lot is expected to be completed by the summer.

Blackwell was city clerk when Ozark leaders laid out plans for a terminal 15 years ago.

“This is something to be proud of, to see something you planned 15 years ago come to a completion phase,” he said.

“This is as much for the community as it is for aviation.”

Blankenship said there are no intentions to build a commercial terminal.

“The airport is a part of economic development that we use to attract large corporations because many times your airport is the first thing they see,” she said.

“If they can’t see that you’re caring for your airport, how can you convince them that you’re taking care of your city?

- Source:  http://www.dothaneagle.com

Quebec Inc’s red ink: Taxpayers likely to lose big in backing Bombardier’s CSeries program

Alain Bellemare, president and Chief Executive Officer Bombardier Inc., right, and Quebec Economy Minister Jacques Daoust shake hands after a news conference Thursday, October 29, 2015 in Montreal.



Taxpayers are likely to lose big by backing Bombardier’s CSeries program, as they usually do when government takes a flyer in business

 
The Quebec government has just announced that it is going to invest $1.315 billion in a limited partnership with Bombardier in order to acquire a 49 percent stake in the new CSeries aircraft program.

Quebec taxpayers would be well advised to return to their seats and fasten their seatbelts, because this a very high risk investment. Experts are in general agreement that airlines have ordered far too many planes in recent years, and that these investments could be threatened in case of an economic downturn.

Although it’s too soon to pass judgment on this particular bailout plan, Quebec’s past experience with “state capitalism” is hardly encouraging. Becoming part-owner of an aircraft manufacturing program for a plane which has yet to see the light of day, if it ever does, and which seems to interest no other manufacturer, is in fact perfectly emblematic of the province of Quebec’s public investment in private companies.

Among the many failures of this kind of interventionism, some will recall the General Motors plant in Boisbriand. In 1987, the provincial government of Robert Bourassa and the federal government of Brian Mulroney jointly signed off on a $220-million interest-free loan, reimbursable starting in 2017. Alas, the factory closed its doors on Aug. 29, 2002. If this money had simply been invested in the market, it would have earned around 10 per cent annually.

Others will remember the Gaspésia fiasco, which saw the government sink $145 million in the Chandler pulp and paper company in the early 2000s. Another example is the Electrolux plant in l’Assomption, which closed despite a financial contribution of nearly $5 million from the Quebec government, less than half of which was ever recovered.

Already back in 1993, former Caisse de Dépôt et Placement manager Pierre Arbour estimated the total cost of the failed attempts to save Steinberg and Brascade-Noranda, as well as the difficulties of Domtar around that time, at $1.7 billion. Through its investments in private companies, the Quebec government has a long history of financial fiascoes. Whereas politicians do not hesitate to highlight the number of jobs concerned every time they advance funds, all of these botched projects have been costly for taxpayers, without actually saving any jobs in the end.

Of course, in certain cases, the assistance seems to have worked. There is the case of Paccar, for instance, in Ste-Thérèse, which benefited from a $23.5-million loan from Quebec and Ottawa. In other cases, the government recovered the sums invested, like when Hyundai had to close its plant in Bromont and reimbursed the $50 million of public assistance it had received.

Quebec isn’t the only Canadian province that has made shoddy investments. In 1987, Newfoundland and Labrador invested in the Sprung Greenhouse, with high-tech hydroponics, a debacle which cost taxpayers $22 million. British Columbia’s $450-million fast ferries scandal also deserves a mention.

The federal government, which Bombardier hopes will also invest in its CSeries program, already has a bad history with airplane investments. The world’s first photographic survey plane was ordered in 1926 by the Department in National Defense. The Canadian Vickers Velos was a float plane that couldn’t fly… or float, for that matter. The project was abandoned after the prototype sank twice. Royal Canadian Airforce Flight Lieutenant R.S. Granby wrote that “it is considered that this aircraft is most unsuitable for any operation.” It has been nominated as the ugliest plane in the world, and was apparently known as “The Dead Loss” by its factory workers.

Bombardier searched for private partners within the industry, but was unable to conclude an arrangement with Airbus, Boeing, or other manufacturers. This doesn’t seem to be due to a lack of liquidity, either; Airbus launched a one-billion-euro share buyback program last week. This should have sent a strong signal regarding the actual commercial potential of the CSeries planes. The government is investing in a product on which the private sector has already rendered its verdict, and for which there is heated competition. Besides the already much more popular Boeing and Airbus models in the same category, the Commercial Aircraft Corporation of China unveiled Monday morning a jet plane that will compete directly with the CSeries. If taxpayers had had the choice, it is very likely they would have chosen a less risky investment.

Bombardier would also have made less risky choices, if not for its longstanding relationship with the political authorities. Since its management knows very well that the Quebec government will never let the company go bankrupt, it can allow itself the luxury of gambling on much riskier operations and products than it otherwise would. Why be prudent when it’s clear that taxpayers will be the ones picking up the tab should things go wrong?

If the Quebec government wants to turn the page on financial fiascoes, it will sooner or later have to put an end to its subsidies of big business. Which means that someday, Bombardier will have to learn how to fly with its own wings.

Original article can be found here:  http://business.financialpost.com