Eric Martel, President and CEO of Bombardier, does not fear increased competition while his rival Gulfstream prepares the launch of new business jets.
“Currently, there is nothing that my competitors are doing today that worries us or that makes us accelerate something,” said the manager on the sidelines of an event highlighting the delivery of the 1000e Global family plane, held at its Dorval plant on Thursday.
Competition is poised to intensify in the business jet market. Gulfstream recently announced that it will launch two new aircraft. One of them, the G400, could represent a competitive risk for the Challenger 650, some industry observers believe.
In a recent meeting with financial analysts from RBC Capital Markets, senior executives at Bombardier said they were assessing the appropriateness of updating or replacing the Challenger 650. This is a regular process, qualified Mr. Martel during the press briefing. “In terms of products, we are still evaluating. It is a process that never stops with us. We have several scenarios. We haven’t made any decisions yet. “
For Bombardier, there is a significant financial difference between a possible update of the Challenger 650 or the development of a new device, underlines Walter Spracklin of RBC Capital Markets. “An update would require little capital expenditure and respect the financial framework of the company, while a new model would represent a significant increase in expenses compared to forecasts. “
Konark Gupta of Scotiabank, however, doubts Bombardier will be able to meet the targets it has set for itself by 2025 due to increased competition. “The increased competition from Gulfstream and Dassault could force Bombardier to increase its capital spending, or could weigh on its margins. “
1000th Global aircraft
Bombardier celebrated with great fanfare on Thursday the delivery of its 1000e aircraft of the Global family. and aircraft were delivered to NetJets, which owns one of the largest business jet fleets in the world. This is the first aircraft in an order for 20 Global 7500s.
The contract allows the Global 7500 “to become NetJets’ flagship aircraft and is a milestone for all of us, as we both conclude a remarkable year in the aviation industry,” said Eric Martel in a press release.
Bombardier began the development of the Global family in 1993 with the Global Express business jet, which entered service in 1999. The Global 7500 program, for its part, was launched in 2010. The first deliveries were made. held in December 2018.
The company took the opportunity to unveil a study commissioned from PricewaterhouseCoopers on the economic impact of the Global 7500 program. The study claims that the Global 7500 program would have contributed $ 4.8 billion to Canada’s GDP between 2010 and 2019. Most of the spinoffs are in Quebec, ie $ 3.4 billion. Over the same period, the program would have supported an annual average of 3,386 jobs, including 1,713 direct jobs. This would have enabled the federal government and the provinces to obtain $ 732 million in tax revenue.