Saturday, November 28, 2020

Bombardier announced job cuts after the poor quarterly performance

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Bombardier’s CEO hint about the job cuts as a broader plan to revive the business after the company was unable to make quarterly profits due to the current Coronavirus pandemic.

Bombardier already selling its assets to reduce the cost. Recently, the company sold its rail division to French train maker Alstom SA, to become a pure-play business jet maker.

Martel told reporters that in the next few weeks company will decide what exactly needs to be done to reduce our costs and it is clear that there will be some job cuts in the coming weeks.

The company is also facing an investigation by the U.K. Serious Fraud Office which is related to a decade-old sale of aircraft to Indonesian carrier Garuda.

The company is increasing its deliveries of its Global 7500 jets up to 12 in the last three months of 2020. While the corporate aircraft deliveries will decline by 30% during 2020 but the company see a rebound in private flights.

Martel is expecting more orders for its mid-sized Challenger business aircraft because the price went down during the current pandemic due to surplus inventory.

The company only sold 24 units of its corporate jet in the quarter compared to 31 a year ago. But revenue from business aircraft rose about 10% since higher-priced Global 7500s made up a third of deliveries

Bombardier announced quarterly results on Thursday and reported adjusted EBITDA of $176 million for the quarter ended Sept. 30, compared with $255 million a year earlier. Experts were expecting EBITDA to be $179.8 million. There was no change in the share price in the afternoon session. The free cash flow usage was $706 million during the quarter,and it remains to break even during the second half of 2020.

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