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00:00Paul, good to have you with us. Talk to us about why this fresh investment makes sense.
00:04Why it's logical for Bombardier?
00:08Well, first of all, thank you for having me on. You know, it's a really exciting point in Bombardier's history.
00:13So I really appreciate the opportunity to talk about our long-term vision and our strategy for our aftermarket growth
00:19in Asia-Pacific.
00:20Your question of why, well, it's all about continued growth, right?
00:24And if you think about our Asia-Pacific market, it's a very, very important market for Bombardier.
00:28Anyway, but when I say continued growth, we started this journey back in 2014 with our first service center in
00:35Singapore, 80,000 square foot facility.
00:38In 2022, that grew to a quarter of a million square feet. The demand was so high.
00:42So we tripled the space we have.
00:44And what we're announcing today is actually this groundbreaking this afternoon is in addition of another quarter of a million
00:50square feet.
00:50So basically going from 80,000 square feet to 500,000 square feet of capacity or capability within a 14
00:57-year period.
00:58And that's all about taking care of our customers.
01:00So it's not just about having space for the aircraft that are coming into the region or the growth in
01:05utilization.
01:06It's about offering a premium service to our customers.
01:09It's having a fully encompassed ecosystem of services where they can come in and have a one-stop shop.
01:15And we make it easy for them to not only buy the aircraft, but also for use them for many,
01:20many years to come.
01:23Paul, did you consider a brand new location?
01:26I mean, Singapore is only one of two services centers for Bombardier in the APAC region.
01:33So we actually, if you look at our APAC region, we service the region in three dimensions.
01:38The first one is in China.
01:39Our first service center is in Tianjin.
01:42And then in Australia, we have a service center in Melbourne.
01:45And of course, our main hub is in Singapore.
01:49If you look at it, it is one of the main economic hubs of the region.
01:52We have a lot of our customers.
01:54We have about 320 of our aircraft that are in this region, with the majority of them being in Singapore.
01:59We see a continued growth.
02:01And for us, Sellita Airport was the right solution.
02:04With the increase in utilization, we see a lot of family offices that are bringing their aircraft into Singapore.
02:10And of course, we're delivering a lot more aircraft in this region.
02:13So it was just normal that we picked the same airport we are today, Sellita Airport.
02:18And we continue to expand that footprint to serve our customers.
02:23Paul, from the sound of it, Bombardier is actually future-proofing future growth.
02:29How much of that is being addressed by this new investment?
02:34Well, if you look at it, Bombardier really has three businesses.
02:38Our OEM and our manufacturing space, which is the majority of our business.
02:42And then we have two growth sectors that we've been very vocal about.
02:45Our aftermarket growth segment, which was, you know, five years ago, a billion dollars.
02:50And last year, we closed at $2.3 billion.
02:52And we have plans to grow that above $3 billion and more.
02:55And then we have our defense space.
02:57When we talk about future-proof, it's all about, you know, we deliver about 150 aircraft a year into the
03:03market.
03:03A lot of them are coming into Asia-Pacific.
03:05But there's a global expansion that we've been on.
03:08Back in 2020, we had about 2 million square feet of capacity globally.
03:12In 2025, we grew that to 3 million square feet of capacity.
03:15And we're looking to extend that to 4 million square feet of capacity because it's all about taking care of
03:20our customers.
03:21And it's offering, like I said, that ecosystem of services.
03:24It's not just the maintenance or scheduled maintenance.
03:27It's unscheduled maintenance.
03:28And it's component repair and overhaul.
03:30And it's interior and it's paint.
03:32And it's providing a fully encompassed service for our customers.
03:38You talk about global growth.
03:40How much of that is actually the Asia-Pac region?
03:43When you take a look at your order book, it stands at the record $20 billion or so.
03:48How much of that comes from the region?
03:52So our order book, we've hit a high of backlog of $20 billion, which we're very proud of.
03:58It's the first time in our history of our company.
04:00The Asia-Pacific region accounts for 7% to 10% of that if you look at the historical order
04:05book and in terms of the service that we provide here.
04:08And we're looking to grow that, of course.
04:10There's a lot of demand that's coming out of the region.
04:12Of course, the aircraft that are coming into Asia-Pacific are our large market flagship global 5,500, 6,500.
04:19And, of course, now the market leader global 8,000.
04:22So, of course, we need more footprint and we need to make sure we can quickly access that footprint to
04:27service our customers.
04:31The question really, Paul, where is that growth coming from?
04:35Are we talking about high net worth individuals who want their jets and hands to services?
04:41Are we talking about companies which also charter out their jets?
04:45Where is growth coming from?
04:48Yeah, if you look at our market segments, they've traditionally been split fairly equally, where we have high net worth
04:54individuals, we have Fortune 500 companies, we have fleets and fractionals, and then we have retail and defense.
05:00If you look at the main three segments, they're about 30% each.
05:03So, you know, high net worth individuals and retail, about 30%, fleets and fractionals, 30%, and, of course, the Fortune
05:10500s, 30%.
05:12So, it's fairly equal, and we're seeing that equal spread in the Asia-Pacific region as well.
05:20Paul, I want to talk about the perennial issues within the industry.
05:24It is about supply chain disruptions, about deliveries.
05:28We know that you've targeted about, what, 157 aircraft deliveries this year.
05:32Almost halfway through the year, where are you with that?
05:36So, I mean, we're right on track for our deliveries.
05:39We had a very, very strong Q1.
05:40And if you look at our delivery profile, it's always the same.
05:43We're a little more back-ended into the second half of the year.
05:46You know, there have been supply chain issues that the industry has to deal with.
05:50I think we did something a bit different back in 2020, when most companies were actually retrenching in terms of
05:56supply chain presence.
05:57We actually did the opposite.
05:59We doubled down into the supply chain, and we invested a huge amount of, you know, financial and human capital,
06:04not only into our Tier 1s, but our Tier 2 and our Tier 3 suppliers,
06:07to make sure we understood how we can keep them active, what we understood, where the bottlenecks were,
06:12so that when the growth did come back, we would make sure that we had the sustainable supply chain.
06:16Now, of course, are there still some issues?
06:18Yes, there are certain suppliers with some issues, but we're dealing with them, I think, very, very well.
06:22And we've been very successful with it.
06:27The question is, how resilient your supply chains have been amid the Iran war?
06:32Are you seeing any disruption along the way?
06:35I think that the supply chains have been resilient.
06:38We have seen problems along the way back in 2020, but those have been flushed behind us.
06:43We keep close to our supply chains.
06:45That's part of Bombardier's motto is that we stay very close to our partners, whether they're our customers or our
06:50suppliers.
06:51We want to make sure that we are active with them and we keep the bottlenecks out of the way.
06:55We keep supplying them with information in terms of our long-term forecast so that they can keep growing at
07:01the same time that we keep growing.
07:02I think that our supply chains are strong and that we're going to have another very, very strong year.
07:09And, Paul, of course, the Iran war has gone way longer than most people anticipated.
07:14In fact, President Trump was anticipating three to four weeks.
07:17Now we're into the fourth month.
07:18Is that impacting sentiment and demand for your aircraft, for Middle Eastern customers in particular?
07:26Well, look, we're a global company.
07:28We presently have about 5,500-plus aircraft flying every day.
07:31We have thousands of customers around the world.
07:34So, you know, markets will ebb and flow, but we really look at holistically how the market is doing.
07:39Our backlog is at $20 million.
07:41Demand for our products is strong.
07:43You know, some of our products have a backlog now of two and three years.
07:45We're not seeing an eight-minute slowdown of that.
07:48So we're very, you know, very happy about that piece of our business.
07:52And, you know, we keep seeing the momentum.
07:54So at this point in time, we look at markets globally, and we're seeing strong momentum for our products.
08:01But in terms of the Middle Eastern market, the Gulf region in particular, what are you seeing?
08:06Are you seeing some slowdown?
08:08And if so, are you anticipating, you know, a reversal of the trend?
08:14So, you know, I don't know if there's going to be a reversal of the trend or not.
08:17We're not seeing that much slowdown.
08:18There's still a lot of activity in the Middle East.
08:20Of course, there was a bit of a slowdown, but we're seeing that picking back up.
08:24I was actually just with our Middle Eastern sales team last week.
08:27They're seeing a lot of demand.
08:29You know, the buoyancy is there.
08:30Of course, people are being careful, but we're seeing the resurgence of the demand in the Middle East.
08:37We know that early in the year, Bombardier got caught up in geopolitics, and that impacted your certification efforts.
08:46Where are you with that, and what's the key takeaway from that?
08:52Well, I think you're talking about the political situation between our competitor and the Canadian government.
08:58I think that there's a process within Canada that has to be followed with Transfer Canada.
09:01You know, Bombardier followed it to get certification of the aircraft.
09:05Our competitors are following it as well.
09:07You know, they are going to get certified.
09:08It's the government that's taking care of that, but we're not seeing any issues with that from the government regulation
09:13side.
09:16How about in terms of tariffs?
09:18We've seen how President Trump has reimposed and made tariffs part of his policy with the recent announcement.
09:28How are you navigating all of that?
09:30Well, like I said, we have a global business.
09:32We have 5,500 aircraft around the world.
09:35You know, a part of our business, of course, is in the United States.
09:37We stay very close to it.
09:39We're navigating it carefully.
09:40We're making sure that we're making, you know, all the right decisions for our company, for our customers, for our
09:44suppliers.
09:45You know, we have a large supply base.
09:46We presently have 2,800 suppliers in the United States that we serve and thousands of our customers.
09:51It is an integrated supply chain in North America.
09:54So, you know, any impact clearly impacts the overall aviation space in North America.
09:58So we're watching it closely and making sure we do all the right things.
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