Bombardier Inc said it received the first order in 16 months for its CSeries aircraft, sending its shares up as much as 30 percent and overshadowing news of the planemaker’s lower-than-expected quarterly results and plan to cut 7,000 jobs.
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Feb 17 Air Canada said its costs would fall this year if the Canadian dollar remained unchanged from 2015 levels, and announced plans to buy up to 75 CS300 aircraft from Bombardier Inc as part of a plan to renew its fleet.
Amid the bad news there was a sign that Bombardier could be reviving its fortunes: a letter of intent that could see Air Canada buy 45 CSeries 300 planes, with an option to buy up to 30 more.
“We’re thrilled to welcome Air Canada as our first mainline, worldwide carrier located in North America”.
3,200 jobs will be cut in Bombardier’s transportation, or rail, division.
Layoff notices are expected in the next few weeks and should be completed by next year.
Last November, the Province of Quebec invested $1 billion in Bombardier, ratcheting up expectations that either Boeing or Airbus would file a complaint with the World Trade Organization over the government funding. Bombardier announced Wednesday it will eliminate 7,000 positions over two years.
SINGAPORE – Airbus and Boeing announced big deals Wednesday at the largest airshow in Asia, underscoring the region’s role as a driver of industry growth despite greater caution among plane buyers.
“It’s always a sad moment when jobs are lost in this country”, said federal Transport Minister Marc Garneau.
Shares of Bombardier, which also benefited from a planned reverse stock split, closed up 21 percent at C$1.09 in Toronto after climbing to C$1.17. Having reached agreement on US$2.5 billion worth of asset sales in the fourth quarter, Bellemare is now attempting to secure additional financing from Canada’s federal government.
The company was founded in 1942 by Joseph-Armand Bombardier, whose most famous invention was the snowmobile.
Bombardier’s fortunes may be improving as the Quebec-based aerospace company begins shipping its C Series jets to customers, but aviation experts say the turbulence is far from over.
Among other things, Bombardier reported its revenue in the fourth quarter ended December 31 was $5 billion, down from just under $6 billion a year earlier.
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Bellemare said that Bombardier may have borrowed about $1 billion since the mid-1980s, but it generated more than $15 billion in government tax revenue over that period. It said it would present shareholders with a proposal at its annual meeting later this year to consolidate its shares at an undetermined ratio in a bid to bring its share price up to a range of between C$10 and C$20 each.
