Is Bombardier Aerospace on a path to abandon regional jets, a market it pioneered two decades ago? Guy Hachey, the Canadian airframer's president and chief operating officer, answers that question with a positive spin.

Yes, he acknowledges, Bombardier's future in the airliner industry centers on the new CSeries aircraft, which made its first flight in September and is aiming to carve out a niche in the 100-150-seat market. With a CSeries development price tag of $3.9 billion—which comes on top of considerable sums being spent to refresh and expand the company's business jet lines—the CRJ regional jet family seems to be the odd man out, destined for eventual obsolescence. But Hachey insists the aircraft will remain commercially viable for years to come. “I don't see the demise of the CRJ for quite a while,” he tells Aviation Week (see page 46).

That is a rather bold assertion, considering that Embraer is embarking on a complete overhaul of its “E-Jets” that should wipe out the operating cost advantage of the CRJ900 (pictured). The E190-E2, E195-E2 and E175-E2 will sport next-generation Pratt & Whitney geared turbofan engines—the same powerplant the CSeries will use—and are designed to offer 16-23% better fuel burn and 15% lower maintenance costs when they enter service in 2018-20.

But Hachey believes the CRJ, with some modest performance improvements, can continue to win sales in the 70-100-seat market by offering value. “We'll just compete in a different way,” he says. “We will be the low-cost guy, whereas today we usually are the industry's higher-cost guy because we've had more sophisticated designs.” Coming from a veteran of the automotive industry, that sounds a little bit like turning a Cadillac into a Chevrolet. Then again, General Motors sells a lot more Chevrolets than it does Cadillacs.

Demand for CRJs slumped during the global economic downturn, forcing Bombardier to cut production rates and eroding backlogs to uncomfortable levels. But Hachey says improved demand, such as American Airlines' order last week for 30 CRJ900s with options for 40 more, has laid the groundwork for a solid rebound in production. “We're going to do much better,” he predicts.

Then there is the question of whether Bombardier has deep enough pockets to carry the CSeries to market success. By offering a slightly stretched version that could carry 160 passengers, the company has dropped all pretense that it is not pushing up into the lucrative segment long dominated by the Airbus A320 and Boeing 737. As expected, the two dominant airframers are vigorously defending their turf.

Bucking popular sentiment, Hachey dismisses talk that the CSeries has not gained market traction. He insists sales are on track to meet Bombardier's goal of 300 firm orders from 20-30 customers by the time aircraft enter service in late 2014 or 2015. (The company declines to say exactly when until more flight tests are under its belt.) He also complains that CSeries sales are often benchmarked against Airbus and Boeing. “We're being compared to two companies that produce 450-500 aircraft per year,” he says.

That is certainly a fair point. And Hachey insists Bombardier still expects roughly 7,000 sales in the 100-150-seat market during the next 20 years. It sounds good—except that Airbus, Boeing and Embraer all maintain that Bombardier is chasing a market niche that simply does not exist.

Whatever the case, Hachey deserves kudos for his efforts to reshape Bombardier into a leaner, more competitive company. During 30 years at Delphi and General Motors, he witnessed how globalization upended the auto industry. A similar phenomenon is now starting to occur in the aircraft industry, thanks to the arrival of new competitors from China, Japan and Russia. That means Bombardier can ill afford to repeat its mistakes of the early 2000s, when investment in new products dried up, allowing Embraer to catch up in the regional-jet market.

Bombardier has been investing about $2 billion a year in product development. While that figure is expected to decline about 50% once the CSeries development is completed, Hachey is already thinking about where the company will make its next bets. “I've challenged my team to look at the next 15 years and said, 'What do we have to do?'” he says. “We are going to be level-loading at a certain level of investment and engineering. We're not going to go back to near-zero and then wait for the next mountain.”