Bombardier was having a good week, having delivered a milestone 1,000th super mid-size aircraft, a Challenger 3500. The company also set 100 speed records with its flagship Global 7500 jet and the Global 8000 approaching certification and entry into service. Under normal circumstances, the company would be celebrating.
Still, the specter of tariffs from the United States has become a reality, and these will have a significant impact since most business jet sales are in the US market.
Delivery Milestone for Challenger 3500
The good news is that the 1,000th super mid-sized delivery went to JN Family Enterprises, a long-standing Bombardier customer.
Éric Martel, President and CEO of Bombardier, said, “..reaching the delivery of our 1000th super-midsize aircraft marks a defining moment for Bombardier. This milestone is a testament to the dedication and exceptional talent of our employees, as well as the trust and loyalty of our customers around the world… Challenger super-midsize aircraft have been a game changer in the industry as they defined a new business jet segment, and we are excited to continue building on this legacy.”
Global 7500 Speed Records
Bombardier announced its flagship Global 7500 aircraft had achieved another milestone by setting its 100th speed record. That record occurred on a flight from San Luis Obispo to London Biggin Hill in nine hours and 17 minutes at an average speed just under 1,000 km/hr. The Global 7500 has a top speed of Mach 0.925 and its sister airplane scheduled for first deliveries this year, the Global 8000, has a top speed of Mach 0.94. With an upgrade path to the Global 8000 for Global 7500 owners, better performance and range are expected soon.
“Bombardier customers need a reliable, fast, efficient business tool that gets them to destination quickly and efficiently, and the Global 7500 aircraft sets the standard in the ultra-long-range class for its outstanding technological advancements and impressive performance capabilities. As these impressive records attest, the aircraft consistently shows it has the speed to successfully complete any type of mission,” said Jean-Christophe Gallagher, Executive Vice President, Aircraft Sales and Bombardier Defense. “And with our Global 8000 set to enter into service later this year, we can’t wait to build on this speed record momentum and take it to even higher levels across the fleet.”
The Tariff Crisis
Donald Trump’s tariffs were implemented this morning. The 25% tariff will severely impact Bombardier, as most of its customers are located in the United States, the world’s largest business jet market.
With tariffs implemented, it is difficult for Bombardier to absorb the additional costs, given their margins, and we expect a material impact on revenues and profitability. While Bombardier has done an excellent job reducing debt after the CSeries development nearly bankrupted the company, it may need to pause its debt payoff schedule if revenues and deliveries falter under a tariff regime.
The Bottom Line
Aviation is a multinational industry, and retaliatory tariffs could quickly backfire against the largest US exporter, Boeing, should tariffs be implemented. Much like the auto industry, which has integrated US, Canadian, and Mexican supply chains, implementing tariffs will result in havoc in multiple industrial sectors, including aviation.
We know the result of the Smoot-Hawley tariffs in the 1930s, which contributed to the Great Depression. While we had hoped saner heads would prevail, Trump pushed through his idea. Let’s hope that history doesn’t repeat itself.
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