Canadian aerospace company Bombardier announced, during the release of its annual results for 2020 earlier this month, its latest steps to return to profitability. The company is now focused entirely on the manufacture and support of business jets, having disposed of its commercial aviation and aerostructures operations (to Airbus and Spirit Aerosystems respectively) and its ground transportation – railways, trams and monorails – business (to Alstom), to escape severe financial difficulties.
During last year, Bombardier made a total net loss of $568-million, a significant improvement over the $1 607-million net loss for 2019. However, of the 2020 loss, only $170-million came from the company’s continuing operations, while $398-million came from operations that had now been discontinued. (The sale of the transportation business had only recently been concluded.)
Bombardier was starting the year with ‘pro forma’ cash and cash equivalents of some $5.4-billion (which included the income from the sale of the transportation business) and a pro form a net debt of about $4.7-billion. Last year, its business aircraft operation accrued revenues of $5.6-billion, which was a 3% improvement over 2019. This was despite a significant impact, from the Covid-19 pandemic, on a number of the company’s revenue streams.
“With our strategic repositioning now complete, we are very excited to embark on our journey as a pure-play business jet company,” affirmed company president and CEO Éric Martel. “Our unmatched product portfolio, world-class customer services network, and incredibly talented employees give us a strong foundation to build upon. We are encouraged by our momentum in the fourth quarter and are confident in the actions we are taking to navigate through the pandemic and better position the company for a market recovery.”
Nevertheless, Bombardier was taking and would launch new initiatives to improve its cash generation and profitability, reduce its cost base and increase its agility and efficiency. It was seeking to produce, by 2023, $400-million a year in recurring cost savings. This year, savings were expected to be around $100-million and the company would suffer a one-off charge of $50-million for its restructuring. Completion work for the Global business jet family would be consolidated in Montréal in Quebec province, in Canada, and options for its underutilised industrial and hangar space at Quebec City would be reviewed. The disposal of its electrical wiring interconnection system business in Querétaro, in the Mexican state of the same name, had already been announced.
And some 1 600 jobs would be cut. “Workforce reductions are always difficult, and we regret seeing talented and dedicated employees leave the company for any reason,” he said. “But these reductions are absolutely necessary for us to rebuild our company while we continue to navigate through the pandemic.”
Bombardier would also focus on the production of the Challenger and Global business jet families, ending the manufacture of the long-lived Learjet family later this year. Last year, the company delivered 59 Global family aircraft, 44 Challengers, but only 11 Learjets.