Analysis: What the Temporary Closure of De Havilland Canada’s Production Line Means
The crisis that the global aviation industry is experiencing, brought on by the coronavirus, is unprecedented. Demand for air travel has plummeted and many governments around the world have banned many people from travelling.
Airlines have had to respond by grounding most of their fleet. Some have even grounded their entire fleet. It means airlines now have very little cash-flow and are in no position to pay for aircraft on order. Even if an airline was willing to take delivery of aircraft, it would be impossible to deliver right now, due to the restrictions imposed by governments on international air travel.
De Havilland too has to manage its cash-flow as well as protect the safety of its workforce in light of the virus outbreak around the world. The temporary pause to production is not surprising in light of the current crisis.
It also gives the aircraft-maker some time to plan for the future. One matter De Havilland will need to decide on, is where to relocate its assembly line in future. The Dash 8-400 production line is in Downsview, an area of Toronto.
But the aircraft program’s previous owner Bombardier sold the Downsview site a few years ago. Bombardier announced in June 2018 that it had completed the sale of the site to Canada’s Public Sector Pension Investment Board and that, pursuant to a lease agreement with the new landlord, it would continue to operate the aircraft factory there “for a period of up to three years, with two optional one-year extension periods.”
Public Sector Pension Investment Board plans to redevelop the site and has disclosed that Downsview Airport is due to close in 2023.
Production of Dash 8-400s will resume, as it still has at least 18 aircraft on firm order – six for TAAG Angola Airlines, six for Ethiopian Airlines, three for Biman Bangladesh Airlines and three for Nigeria’s Elin Group.
But it needs to build its order backlog further to warrant the future investment in relocating the final assembly line to a new site.