Bombardier exits commercial aviation; Airbus, Quebec take remaining stake

Daniel Fowler
February 16, 2020

Bombardier sold its Belfast operation to United States company Spirit AeroSystems past year and a spokesperson for the firm said the "Airbus A220 programme's new ownership structure has no impact on our Belfast site's wing manufacture and assembly for this aircraft".

While high-margin jet deliveries continue to ramp up, analysts point to volatility in the luxury market of private planes compared to the relatively stable field of railcar construction, which is fuelled by government infrastructure projects. "We're going to continue looking at our options and see if there are ways we can accelerate the deleveraging phase of the turnaround plan". As you can understand, it's very sensitive, " chief executive Alain Bellemare said on a conference call with investors Thursday.

Over the past five years, Bombardier has sold its waterbomber business, its Q400 turboprop unit, its CRJ regional jet franchise and its flight training business among other assets.

Bombardier, which reports its financial results in USA dollars, saw revenue fall three per cent in 2019 when compared to past year, down to $15.8 billion.

Under the new deal, Airbus can buy out Quebec's stake in 2026, three years later than initially planned. As part of this transaction, Airbus, via its wholly-owned subsidiary Stelia Aerospace, has also acquired the A220 and A330 work package production capabilities from Bombardier at Saint-Laurent in Quebec.

"We are committed to this fantastic aircraft programme and we are aligned with the government of Quebec in our ambition to bring long-term visibility to the Quebec and Canadian aerospace industry".

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Blankfein, a registered Democrat, supported Hillary Clinton in the 2016 presidential election and has donated to Republicans in the past.

Bombardier reported a loss of $1.61 billion in 2019 and a loss $1.72 billion last quarter.

Bombardier Transportation revenues dropped seven per cent and earnings before interest and taxes (EBIT) fell 97 per cent previous year.

The company is weighing a possible sale of its remaining business jet or rail divisions.

Bombardier updated its financial guidance Thursday, projecting revenue from continuing operations will grow to about US$15 billion from $13.7 billion.

Bombardier's shares closed up 10 cents, or 6.37 per cent, to $1.67 on The Toronto Stock Exchange.

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