Page 72 - World Airnews Magazine April 2020 Edition

NEWS DIGITAL

BOMBARDIER FACES TESTING

TIMES

By Brian Foley

who purchase larger, more expensive order dissuader nonetheless. Bombardier’s
aircraft. Challenger unit fits squarely in this
Within a month of shedding its As a result they’re more dependent segment.
last remaining business unit to pay down on the health of their company balance Buyers of the largest business jets,
debt and focus solely on building business sheets or personal portfolios to qualify for such as Bombardier’s top-of-the-line
jets, Bombardier’s mettle is already being financing which is often the only way they Global series, are more resistant to
can afford it.
tested. These buyers are also the first to cancel economic shocks and have their own deep
financial resources to follow through with
Business jet sales just don’t do well in orders already placed since they may no a purchase commitment. Fortunately for
times of economic uncertainty and scary longer qualify for funding. Most impacted Bombardier, margins are generally outsized
stock market gyrations, a description that would be the Learjet division whose here compared to the price-elastic small-
defines today’s global financial turmoil products form the bottom entry point and mid-size market. The large segment
precipitated by the corona virus. of Bombardier’s business jet product held up relatively well during the global
Some who were considering a plane portfolio. financial crisis.
purchase will now wait and see where Moving up the food chain, buyers of However part of the big cabin resilience
things are headed, looking for any sem- mid-sized jets suffer many of the same back then had to do with emerging markets
blance of financial market stability before vulnerabilities as small jet buyers, just not that continued to boom despite the crisis
pulling the trigger. to the same degree. As evidence, during such as China, South America and Russia
Private flying is very much a discretionary the 2008 financial crisis Textron Aviation’s - most of whom kept their outsized orders
spend, with easy alternatives to buying an Cessna unit, specialists in small- and for the biggest jets.
aircraft such as first class airline tickets or mid-size jet production had to lay off half With these regions now in comparative
chartering business jets. its workforce as prospects evaporated and economic disarray today, there won’t be
Typically it’s the low end of the business order holders ran for the exits. that same safety net for big jets this time.
jet market that’s first and most affected. While it’s believed the current economic Sales may get dinged a little harder this
The buyers of small cabin aircraft just don’t fundamentals are different today and will time, but still not to the extent of smaller
have the financial wherewithal of those not lead to the same pandemonium, it’s an jets. Q

Last year Bombardier entered into an agreement
with Mitsubishi Heavy Industries regarding the
sale of the CRJ regional aircraft programme

World Airnews | April Extra 2020
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