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Bombardier to Lay Off 1,600 Staff, Stop Learjet Production

: Feb 16, 2021 - : 4:09 am

Bombardier is halting Learjet aircraft production and slashing about 1,600 jobs this year as it transitions to being solely a business jet manufacturer.

The majority of those being laid off are based in Quebec. About 250 jobs in Wichita are also likely to go because the company is stopping the production of Learjet.

Pre-pandemic, Bombardier had anticipated breaking even on free cash flow in 2020. The ongoing COVID-19 situation has forced a change in the timeline: the company now expects to break even between 2021 and 2023. This year the company anticipates business jet deliveries will be in line with 2020, showing modest revenue growth. The company will now focus on the Challenger and Global business jet models.

“We view 2021 as a transition year,” Chief Executive Éric Martel told analysts.

Bombardier reported a 19.7% fall in business jet deliveries to 114 in 2020, in line with industry trends. However, 2020 revenues from corporate aircraft activities increased by 3%, assisted by year-end deliveries of Global 7500 jets and a bounce back in demand.

The company reported 2020 free cash-flow usage from continuing operations of US$1.9 billion, while it expects to reduce cash burn in 2021 to better than US$500 million. The company said it now has pro forma cash and cash equivalents of about US$5.4 billion, including proceeds from the sale of its transportation unit, and a pro forma net debt of about US$4.7 billion. Bombardier reported an adjusted loss before interest and taxes of US$165 million for the quarter ended Dec. 31, as opposed to a profit of US$168 million the previous year.

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