• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • COMTECH banner

BATTLESPACE Updates

   +44 (0)77689 54766
   

  • Home
  • Features
  • News Updates
  • Defence Engage
  • Company Directory
  • About
  • Subscribe
  • Contact
  • Media Pack 2024

BOMBARDIER FACES UNCERTAINTY

September 1, 2004 by

25 Aug 04. The FT reported that Bombardier, a Canadian transport equipment group, said it might further scale back production of its regional jets, depending on the financial health of US Airways and Delta AirLines, its two biggest customers.

The two airlines, which make up 40 per cent of Bombardier’s order backlog, are struggling to avoid filing for protection from their creditors under US bankruptcy law.

“Only a fool would deny that there are some major challenges” in the aircraft industry, Paul Tellier, Bombardier’s chief executive, said on Wednesday, as the company announced a two-thirds drop in second-quarter earnings.

But Mr Tellier said difficulties in the regional jet market were balanced by growing demand for Bombardier’s Learjet, Challenger and Global Express business jets, and by gradual progress in putting the company’s rail equipment division on a more stable footing.

Bombardier’s net earnings dropped to $23m, or 1 cent a share, in the quarter ended July 31, from $68m, or 4 cents, a year earlier. Revenues rose fractionally to $3.88bn, with a 5 per cent fall from the aerospace division offset by a 9 per cent gain from rolling stock.

Bombardier’s shares, at a 10-year low, lost 10 Canadian cents to C$3 in early trading in Toronto. Nigel Heath, an analyst at Dominion Bond Rating Service in Toronto, said that the US Airways and Delta orders were a “huge uncertainty”. Bombardier’s unfunded pension liability, one of the biggest among Canadian companies, also remains a substantial drain on cash resources.

Nevertheless, in Mr Heath’s view, the potential loss of the US Airways and Delta business “is not life-threatening” to Bombardier, because other airlines would probably take up at least some of the orders, and the company could speed up deliveries to customers in other parts of the world.

“A number of actions could be taken to reduce the pain threshold,” Mr Heath said. Last month, US Airways deferred deliveries of 19 Bombardier aircraft, which were scheduled to start in the current quarter. The airline also converted orders for 23 of the 50-seat CRJ200 to the 70-seat CRJ700. Bombardier announced this year that it would cut production of the CRJ200 this summer.

Pierre Beaudoin, head of Bombardier’s aerospace division, said he was confident that US Airways’ orders for 12 jets still scheduled for delivery this year would go ahead. The production schedule would then be reviewed.

US Airways’ aggressive expansion in its use of regional jets is a critical part of its new business transformation plan. Delta, the world’s largest operator of regional jets, has warned that it will be forced to file for bankruptcy in the absence of a new pilots’ contract and concessions from its debt holders.Mr Beaudoin said Delta had confirmed its regional jet orders, but that bankruptcy protection would raise questions about financing. Discussions are taking place with the airline, Mr Beaudoin said. In contrast to the turbulence in the regional jet market, Bombardier delivered 26 business jets in the quarter to July 31, up from 14 a year earlier.

Mr Tellier said prices had started to improve and the inventory of used aircraft had dropped substantially. A group of 150 Bombardier employees is pressing ahead with a feasibility study for a 100-135 seat aircraft, which would bring the Canadian company into direct competition for the first time with Boeing and Airbus. Mr Tellier said that no decisions had yet been taken.

Primary Sidebar

Advertisers

  • qioptiq.com
  • Exensor
  • TCI
  • Visit the Oxley website
  • Visit the Viasat website
  • Blighter
  • SPECTRA
  • Britbots logo
  • Faun Trackway
  • Systematic
  • CISION logo
  • ProTEK logo
  • businesswire logo
  • ProTEK logo
  • ssafa logo
  • AtkinsRealis logo
  • IEE
  • EXFOR logo
  • sibylline logo
  • Team Thunder logo
  • Commando Spirit - Blended Scoth Whisy
  • Comtech logo
  • GoExporting logo
  • ECHODYNE logo
  • Supercat logo
  • Galvion logo
  • Leonardo DRS logo
  • MTC logo
  • IDC logo
  • IDC logo
  • DVD2024 logo
  • SDSC logo
Hilux Military Raceday Novemeber 2023 Chepstow IAV 2024

Contact Us

BATTLESPACE Publications
Old Charlock
Abthorpe Road
Silverstone
Towcester NN12 8TW

+44 (0)77689 54766

BATTLESPACE Technologies

An international defence electronics news service providing our readers with up to date developments in the defence electronics industry.

Recent News

  • NEWS IN BRIEF – REST OF THE WORLD

    December 8, 2023
    Read more
  • CONTRACT NEWS IN BRIEF

    December 8, 2023
    Read more
  • INTERNATIONAL PROCUREMENT OPPORTUNITIES

    December 8, 2023
    Read more

Copyright BATTLESPACE Publications © 2002–2023.

This website uses cookies to improve your experience. If you continue to use the website, we'll assume you're ok with this.   Read More  Accept
Privacy & Cookies Policy

Privacy Overview

This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
Necessary
Always Enabled
Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
Non-necessary
Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.
SAVE & ACCEPT