Bombardier Inc.: Company Strategy & Performance Analysis
Bombardier Inc. is one of the largest manufacturers of civil aircraft in the world. It is also one of the largest suppliers of rail equipment, systems, and services. As of December 31, 2016, the company operates 73 production and engineering sites in 29 countries with a major presence in the US, Germany, the UK, Canada, France, China, and India. Bombardier is headquartered in Quebec, Canada.
The company operates through four business segments: Transportation, Business Aircraft, Commercial Aircraft, and Aero Structures and Engineering Services. In 2016, the company generated 40% of its revenue from Europe. The business aircraft and commercial aircraft segments accounted for 33% and 15% of the company’s total revenue in 2016 respectively.
MarketLine Premium’s company strategy reports provide in-depth coverage of the performance and strategies of the world’s leading Civil Aerospace companies. The report details company operations in key geographies and offers a comprehensive analysis of each firm’s growth strategy and financial performance. The reports benchmark company performance via key indicators, including order, order backlog, operating expense, operating income, net income, and MRO revenue.
Strong order backlog to drive future growth
Bombardier’s business jets segment posted an order backlog of US$15.4 billion in 2016. The backlog for the business jet segment decreased by -10%, from US$17.2 billion in 2015 to US$15.4 billion in 2016. The commercial aircraft division reported an order backlog increase of 21%, from 361 aircraft in 2015 to 436 aircraft in 2016.
The company received a high number of orders for its CS300 aircraft
In 2015, a total of 361 orders were received by Bombardier, out of which the highest number of orders were for commercial jets. A total of 243 commercial jets were ordered in 2015. The number of regional jets ordered in 2015 was 79 and turboprops saw an order count of 39. The company received the highest number of orders for its CS300 aircraft and the lowest number of orders for its CRJ700 aircraft. The total number of aircraft ordered increased to 436 in 2016, out of which the highest number of orders were for commercial jets. A total of 353 commercial jets were ordered in 2016. The number of regional jets increased to 53 and turboprops decreased to 31. The company received the highest number of orders for its CS300 aircraft in 2016, which makes the model a major source of revenue for the company.
Transformation initiatives drive the company’s revenue
Bombardier ranks third in civil aerospace industry in terms of revenue. Bombardier’s revenue decreased at -11.4%, from US$11.1 billion in 2015 to US$9.9 billion in 2016, attributed to the decrease in deliveries in its business jet segment. Boeing is the market leader with revenues of US$64.0 billion in 2016, followed by Airbus SE. However, Bombardier has been continuously looking to bring new products into the market to remain competitive. For instance, the company’s commercial aircraft segment reached a historic milestone in 2016 as it launched both variants of its C Series aircraft.