Deliveries Slightly Lower, But New Sales Off 46 Percent

There was mixed news Thursday from Bombardier Aerospace regarding its just-completed fiscal year, and projections for the year ahead. While deliveries held up well, production cuts will bring layoffs in the new year.

Bombardier announced 353 aircraft deliveries for the fiscal year ending January 31. That number is down slightly from the 361 deliveries reported for fiscal 2007/2008, but hardly bad news against the current economic backdrop.

A more sobering number was net aircraft orders, which accounts for cancellations. The 378 net aircraft orders for 07/08 was down about 46 percent from the previous year's 698. Noting the big numbers posted in 07/08 represented "an exceptional year," the company says it has "delivered a solid performance in view of the continued worsening of the economy and its impact on the aviation industry."

For the current fiscal year 2009/10, Bombardier says it expects deliveries of business aircraft to drop another 10 percent, but more than offset that with deliveries of 10 percent more commercial aircraft, led by the popularity of its Q400 turboprop. The Q400 has enjoyed a resurgence among airlines looking for fuel efficiency on shorter routes.

Bombardier says it plans no change in the production rates for its CRJ Series regional jets.

Regarding its employees, Bombardier says its long-term strategy is to establish stability in its permanent workforce by using more temps and outside contractors to adapt to temporary fluctuations in workload.

Starting this month, the company says it will cut 1,010 temps and subcontractors, and 350 permanent employees, over a five-mointh period. That represents about 4.5 percent of workers at its facilities in Montreal, Wichita and Belfast. Bombardier estimates resulting severance costs for the fiscal year at less than $5 million.

At the same time, the company is recruiting to fill 600 permanent positions related to its new CSeries and Learjet 85 aircraft, and about 230 interior completion specialists. Those new jobs will be located at Bombardier's at Bombardier's Montreal and Belfast plants.

FMI: www.aero.bombardier.com