in Business & Finance

GlobalData: Bombardier distances itself from commercial aviation with valid reasons

Posted 12 June 2020 · Add Comment

Following the news that Bombardier is planning to cut 600 jobs at its Belfast facility manufacturing A220 wings. Nicolas Jouan, Aerospace and Defence Analyst at GlobalData offers his view on Bombardierís decision.

 

“Bombardier’s move to cut up to 2,500 jobs in its aviation business, of which 600 are based in Belfast, must be understood in the context of the COVID-19 crisis and more fundamental transformations wanted by the company. Even before the pandemic wiped out air travel, and as a consequence eroded the need for commercial jetliners, Bombardier was engaged in divestments to reduce its exposure to aviation with the sale of its regional jet C-Series to Airbus in 2018 and its CRJ program to Mitsubishi in 2019. Considering that airlines and leasing companies accumulate cancellations and postponements of orders, Bombardier seem decided to accelerate its strategy in order to avoid overcapacity.

 

“The former C-Series, rebranded A220, is at the heart of the decision. Airbus decided earlier this year to postpone the planned production increase of the regional jet in spite of relatively good sales figures. The European plane maker still intends to reach an eventual production rate of ten platforms per month, compared to four at the moment, but not before 2026. Bombardier still produces wings for the A220 in its Belfast facility in Northern Ireland, but there is little point in maintaining production rate when the final integrator Airbus seems itself on the back foot.

 

“Regional aircrafts are not favoured by plane makers at the moment. Mitsubishi has shelved its SpaceJet program that was supposed to take off this year. Boeing has withdrawn from a partnership with Embraer on commercial aviation. It is hard to foresee how post-COVID-19 commercial aviation will look like, but anticipated social distancing safety regulations might not be well fitted to the costly, high-density cabins of regional jets. Bombardier’s decision to cut 600 positions in Belfast is both based on the reality of demand, adapted to Airbus’ decision, and on a more fundamental strategy regarding the future of regional jets.”

 

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