Analytical Overview
Note: Unless noted, dollars ($) are US.
Strategy: Bombardier Inc., the world’s second largest business aircraft manufacturer, continues its effort to reshape itself into a small company that is focused on manufacturing and maintaining business aircraft. It sold off major portions of the company to stave off bankruptcy, repay debt and survive.
Burdened by heavy debt, Bombardier sold its rail transportation business, its regional jet (CRJ) business, its aerostructures business, and its remaining interest in the A220 (CSeries).
As with other commercial aircraft manufacturers and suppliers, the company was adversely affected by the global COVID pandemic. Given the already challenging issues due to failed past strategies, the pandemic put downward pressure on sales and the ability to climb out of its steep financial hole.
The company was seriously weakened by its unsuccessful CSeries program. While Bombardier sold its remaining stake in the program to Airbus, the heavy debt load it took on to develop the jet and try to successfully market it continues to burden the company. By the end of 2023, the company had significantly reduced its long-term debt.
Within its business jet operations, it also made cutbacks. It shut down its Learjet family production in early 2022 with the last delivery of the iconic Learjet.
The company is pushing ahead with selected new products such as the Global 7500, which has more than 150 deliveries to date.
The company is working to expand its aftermarket to increase profits and improve business stability. Mainte- nance, repair, and overhaul are viewed as an important part of its sta- bilization and growth strategy.
As the next step in its efforts to ex- pand aircraft services, the company launched its New Smart Services De- fense program, which is focused on special mission, medevac, head-of- state and government operators.
Expanding the company's interna- tional presence is a critical element of this strategy. This involves adding new sales and marketing offices, in- creasing customer services capacity, and increasing overseas manufactur- ing and engineering services.
The company has reoriented its strat- egy towards making profitable sales rather than securing market share. This cultural shift for Bombardier to- wards greater emphasis on financial performance is being reflected in in- creased financial disclosure as well.
Other elements of the turnaround strategy involve aggressive cost-cut- ting to preserve funds.
Strengths: Bombardier enjoys strong support from the Canadian government, which has shown its willingness to provide financial as- sistance in various forms.
Bombardier is a market leader in business jets although it has been re- cently surpassed by Gulfstream.
In business aircraft, Bombardier has a broad mix of large-cabin aircraft in- cluding super large and ultra-long- range aircraft. Bombardier has strength in the medium and upper segments of the market.
