Bombardier to sell Q400 program for $300M, cut 5,000 jobs
Bombardier is selling its Dash 8 turboprop aircraft program to home-based Viking Air for $300 million, Canadian manufacturer revealed on November 8, 2018.
Bombardier revealed in its third quarter 2018 earnings results, that it has entered into definitive agreements for the sale of two of its business divisions.
The Montreal-based plane maker will sell its Q Series aircraft program as well as de Havilland trademark to Viking Air, a wholly-owned subsidiary of Longview Aviation Capital, for approximately $300 million.
The sale includes Bombardier’s Q400 turboprop line as well as assets and intellectual property for other Dash 8 models (the -100, -200 and -300). Bombardier will also sell its business aircraft flight and training activities to Canadian training solutions company CAE.
Turning around or keeling over?
Bombardier said it expects around $900 million in net proceeds from both transactions, which should close by the second half of 2019.
In addition to the sale of its Q400 series, the company said it will introduce a number of cost-reduction measures as part of its “enterprise-wide productivity program”, which it expects to generate $250 million in annual savings at full run rate by 2021.
But the measures have a “cost” of their own: Bombardier said it will cut around 5,000 jobs within the company, half of them in Quebec, over the next 12 to 18 months.
The sale of the Q400 line comes months after the Canadian manufacturer sold a majority stake in its loss-making C Series program to Airbus. The European plane maker has pledged to boost sales of the plane that it rebranded as the A220.
Having heavily invested in the disappointing C Series, as Reuters points out, Bombardier is now in the middle of a five-year turnaround plan through 2020 and is determined to streamline its operations.
Its sole focus now will be on its remaining commercial aircraft line, the CRJ family of regional jets (the CRJ100 and -200).
The company also highlighted its Global 7500 business jet received type certification by Transport Canada and the U.S. Federal Aviation Administration (FAA), and is preparing for it to enter into service before end of 2018.
Making (North) America’s greatest turboprop manufacturer
Bombardier bought the Dash 8 or Q Series manufacturer de Havilland from Boeing in 1992. With the sale of the turboprop program, the entire de Havilland product line will be brought under the same banner again.
Viking Air, the manufacturer of Series 400 Twin Otter, is the Original Type Certificate holder for all out-of-production de Havilland aircraft (DHC-1 through DHC-7).
The completed (all-Canadian) transaction will make its parent – Longview – North America's largest commercial turboprop aircraft manufacturer.
Commenting on the announcement, the chief of Longview, David Curtis, called the Dash 8 turboprop the “perfect complement” to the company’s existing portfolio of specialized aircraft, including the Viking Twin Otter.
"We see enormous value in the de Havilland Dash 8 program, with these aircraft in demand and in use all around the world," he said in a press release.
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