Bombardier – Bad News and Worse News

By Monday, July 27, 2015 0 No tags Permalink 0

Over two years ago, Robert Deluce dropped his game changer on the city and by some accounts PortsToronto.  He asked the city to allow Bombardier Aerospace’s CS100 jet at Billy Bishop Toronto City Airport (BBTCA).  It was bad news for anyone who saw the waterfront reverting to a dirty noisy industrial use. That was then. This is now and the bad news has spread.

Bad News for Bombardier

On July 22, Bombardier’s share price fell to a low of $1.49, a figure not seen since 2001. Fifteen years ago, the share price hit a high of $26.25.

While the Bombardier family’s control of the company is cited as a factor in lack of investor confidence in the company, the catalyst for the drop in the company’s value rests on the CSeries jet development program and the passenger jet market. In fact, Bombardier walked away from the prestigious Paris Air Show last month with no new orders for CSeries jets.

Indeed, the cumulative news was so bad that Robert Deluce and regional airline competitor WestJet publicly expressed confidence in Bombardier when analysts raised questions about the company’s survival. Both Deluce’s Porter Airlines and WestJet operate another Bombardier product, the Q400 turboprop, and both parties have lobbied Toronto councillors for jets at the airport.

Worse News for the Waterfront

It might seem that the bad news for Bombardier might stall or put the jet initiative at BBTCA into abeyance. The opposite is more likely true.

Porter Airlines is the only Canadian carrier that has expressed a firm interest in the CSeries jet. Canadian manufacturer Bombardier needs a home country showplace. Porter Airlines provided that kind of boost with the Q400 in 2006. It’s on deck for an encore with the CS100 and it has the heaviest of hitters on its side: the Harper Government.

The Harper Government’s BBTCA Support

Harper Government support could also be called friends in high places. Robert Deluce and transport minister Lisa Raitt go back a decade when Ms Raitt was CEO of PortsToronto and signed Porter Airlines first Commercial Carrier Operating Agreement (CCOA) that gave Porter a virtual monopoly at BBTCA. See Review of Toronto Port Authority Report

What are the chances then of Transport Canada under Ms Rait standing in the way of any airport initiative that would allow jets?

Lisa and Robert

Lisa and Robert

Did we mention all the Harper Government Conservative party supporters who were appointed to the PortsToronto board saw fit to fund two new ferries and a tunnel to expand airport use?

The Harper Government’s Bombardier Support

In 2010, the prime minister was proud enough of Canada’s home grown successes to arrange an itinerary that flew Queen Elizabeth and Prince Phillip on a Porter Bombardier Q400 to the Blackberry facilities in Waterloo. We all know what happened to Blackberry under Mr. Harper’s watch. Perish the thought that the same would happen to Bombardier.

Indeed, the Harper government seems concerned enough about Bombardier’s future that it is willing to break ranks with the U.S. over sanctions on a Russian oligarch, a confidant of Putin.  This is in spite of Mr. Harper’s support of the Ukraine a target of Putin’s aggression. Why the hypocrisy?

Vladimir Yakunin, head of Russian Railways, who has business dealings with Bombardier Transportation, appears to have escaped any Canadian blacklists. As the CBC reported, Bombardier’s the CEO Pierre Beaudoin had six meetings with Canadian government officials when the original sanctions list was taking shape.

If Bombardier can persuade the Harper government to snub the U.S. government by picking and choosing sanction targets, imagine the pressure it could bring to bear on having jets fly out of BBTCA.

The Irony

Market analysts’ and the market’s confidence in Bombardier’s and the CSeries’ future is dim.  It would be ironic if Robert Deluce wins the right to fly jets out of the BBTCA only to see the CS100 program collapse and another manufacturer’s jets despoil the waterfront.

It’s vital that supporters of Toronto’s waterfront as a cultural and recreational jewel double their efforts to make sure that no jets of any kind are allowed at BBTCA.


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