Bombardier has just given a major boost in its investment into business aviation part of the company. The Canadian manufacturer came to a definitive agreement to acquire the Global 7500 wing program from Triumph Group. The move poses a question whether Bombardier has already made a decision to drop commercial jet division with its only remaining CRJ series program in favor for business aviation.
The Canadian planemaker announced the news it is buying the wing manufacturing unit from U.S.-based aircraft parts supplier Triumph Group on January 24, 2019, claiming the purchase will help to secure the production ramp-up of its business jet. The deal is expected to be closed in the first quarter of 2019, but it remains subject to some closing conditions.
The new purchase should not change Bombardier’s business unit’s 2019 EBIT margin before special items guidance of approximately 7.5%. But some short-term negative aspects are expected; as for 2020, the unit “now targets 50 basis points of margin growth to approximately 8%, the low-end of the previously provided objective,” Bombardier reveals in a statement.
Another step away from commercial aviation?
The announcement comes days after Bombardier CEO Alain Bellemare told Reuters the company is looking into “all strategic options” for its loss-making CRJ regional jet program. Among these “options”, a potential sale, is also not yet ruled out, however, the priority remains to win orders and cut costs, according to Bellemare. The company is expected to reach a final decision on the CRJ program later in 2019.
Bombardier’s backlog as of September 30, 2018, listed 56 CRJ jets orders in the latest available status report. Of them, the vast majority (50 of 56) were for CRJ900.
The CRJ regional jet program is the last remaining commercial aviation program at Bombardier. The company handed its signature CSeries to Airbus in July 2018. In November 2018, the Canadian manufacturer announced a similar faith is awaiting its Q Series. The company sold its Q400 turboprop line alongside assets and intellectual property for other Dash 8 models (the -100, -200 and -300) to Viking Air for $300 million.