2016-01-13

Bombardier Business Aircraft Implementing Business Model Enhancements to Solidify Long-term Profits

  • Executing agreements to create direct sales channels and improve margins
  • Assuming sales leadership through termination of select sales representative and distribution agreements as well as restructuring customer commercial agreements will result in charges of $278 million recorded as special items in Q4 2015

Bombardier Business Aircraft continues to restructure and enhance its business model to improve long-term profitability. To that end, the business segment has completed initiatives to increase the number of direct-to-market channels, including termination of third-party sales representative and distribution agreements, as well as the restructuring of customer commercial agreements. As a result of these agreements, Bombardier will incur pre-tax special charges of $278 million in the fourth quarter of 2015, of which approximately $145 million is non-cash. Of the cash impact, approximately $50 million was disbursed in Q4 2015 and the balance will be paid in 2016.

“We are changing our sales strategy to increase our focus on direct channels,” said David Coleal, President, Bombardier Business Aircraft. “This, coupled with our robust transformation plan, will increase our long-term profitability. Our overall business model enhancements will leverage our class-leading aircraft, which continue to be outstanding business tools for operators in all regions of the world.”

In line with this change in sales strategy, Bombardier terminated select sales representative and distribution agreements. Bombardier will become directly responsible for sales activities in the associated regions leveraging its existing sales teams allowing for increased direct relationships with operators.

Bombardier Business Aircraft has also completed a restructuring of certain customer commercial agreements. These agreements resulted in the cancellation of 24 firm orders, which had an aggregate value of $1.75 billion at 2015 list prices, with an additional cancellation of 30 optional orders. Bombardier expects to sell these positions at improved margins.

“Restructuring these commercial agreements will strengthen our business and solidify our long-term profitability,” added Coleal. “Our sales team is well equipped to increase our position in the marketplace, and ultimately, we expect our current industry-leading backlog to become even stronger.”

Bombardier will release consolidated results for the fourth quarter and 2015 fiscal year on February 18, 2016.

(All amounts in this press release are in U.S. dollars unless otherwise indicated)

Bombardier and The Evolution of Mobility are trademarks of Bombardier Inc. or its subsidiaries.

About Bombardier

Bombardier (BBD-B.TO) and its subsidiaries (Bombardier Group), is a global leader in aviation, focused on designing, manufacturing, and servicing the world's most exceptional business jets. Bombardier’s Challenger and Global aircraft families are renowned for their cutting-edge innovation, cabin design, performance, and reliability. Bombardier has a worldwide fleet of more than 5,000 aircraft in service with a wide variety of multinational corporations, charter and fractional ownership providers, governments, and private individuals. Bombardier aircraft are also trusted around the world in government and military special-mission roles leveraging Bombardier Defense’s proven expertise.

Bombardier is headquartered in Greater Montréal, Québec, and through the Bombardier Group, operates aerostructure, assembly and completion facilities in Canada, the United States and Mexico. Bombardier Group’s robust customer support network services the Learjet, Challenger and Global families of aircraft, and includes facilities in strategic locations in the United States and Canada, as well as in the United Kingdom, Germany, France, Switzerland, Austria, the UAE, Singapore, China and Australia. For corporate news and information, including Bombardier’s Environmental, Social and Governance report, as well as the company’s plans to cover all its flight operations with Sustainable Aviation Fuel (SAF) utilizing the Book and Claim system visit bombardier.com. Learn more about Bombardier’s industry-leading products and customer service network at businessaircraft.bombardier.com. Follow us on X @Bombardier.

For informations

Mark Masluch - Senior Director, Communications

Mark Masluch

Senior Director, Communications