The Canadian plane and train maker has announced that it has missed its quarterly operating profit forecast and, as a consequence, is now eyeing staff layoffs to reduce running costs.
Like so many aviation-related businesses, Bombardier has been heavily hit by the widespread effects of the COVID-19 pandemic. Currently Bombardier is streamlining its business with the sell-off of its rail division to France’s Alstom and in future will be concentrating solely on the manufacture of luxury business and private jets such as its Global and Challenger series.
“In the weeks to come we will decide all the initiatives we need to do to reduce our cost base,” Bombardier CEO Éric Martel told reporters, adding that “It’s sure there will be layoffs that will come with this.”
Having delivered eight of its Global 7500 jets in the last quarter, the company anticipates this number will rise to 12 for the final quarter of the year, which it hopes will see it operating at break-even level for the second half of the year. Corporate jet deliveries dropped to 24 units compared to 31 for the same period in 2019, but business revenue rose 10%, mainly thanks to the Global 7500 making up one third of aircraft deliveries.
Bombardier’s margins and earnings before interest, taxes, depreciation and amortization (EBITDA) took a hit on higher initial production costs for the Global 7500 jets and lower deliveries. Bombardier reported adjusted EBITDA of US$176 million for the third quarter as opposed to US$255 for Q3 2019.
