Bombardier refrains from 2025 guidance but remains bullish in face of potential tariffs
February 6, 2025
As Bombardier’s 2024 year-end results revealed 8% revenue growth year-on-year (reaching a total $8.7 billion), the Montreal-based company remains confident it is “extremely prepared” to weather the potential threat of incoming US tariffs – despite maintaining some scepticism that these will ever come to bear.
“Over the years, Bombardier has created a reciprocal trade balance with the US that can be demonstrated where both we and the US have an equal win,” explained Éric Martel, president and chief executive officer, during the company’s latest earnings call. However, he cautioned that Bombardier must “take time to address the uncertainty created by the threat of tariffs” – a potential 25% additional levy on Canadian imports, revealed by US President Donald Trump on 1 February, alleged to counter what the White House terms “the extraordinary threat posed by illegal aliens and drugs, including deadly fentanyl”.
What the White House has described as “bold action” has, admittedly, been paused for at least 30 days through an interim agreement reached with Canadian Prime Minister Justin Trudeau. However, although this has necessitated Bombardier to formulate “solid contingency plans should [it] face immediate complication for US deliveries,” Martel remained optimistic change would be gradual, if at all. “Any possible scenario, we’re in a good place to do that,” he elaborated; adding that “it’s not going to be like a crisis overnight”.
The importance of Bombardier’s operations to the United States is undisputed. It has more than 2,800 US-based suppliers across 47 states which are responsible for creating tens of thousands of jobs in the country. Five service centres in five different states augment key work in Kansas, the hub of Bombardier Defense’s operations, and where the Global 7500 wings are constructed. “The vast majority of our platforms are made up of more US parts and systems than any other country,” revealed Martel.
Additionally, although a “solid proportion of large aircraft [are] set for delivery in international markets,” ultimately, “the US does remain [Bombardier’s] core customer and shareholder base”. With orders continuing to arrive at an elevated rate year-over-year, “this includes a fare share from the US,” Martel elaborated, although adding that – notably – Bombardier has not yet seen cancellations. However, he caveated Bombardier’s ongoing US popularity by musing: “Don’t get me wrong, the US market is still very important for us but probably has less significance than a few years ago”.
Bombardier’s deliveries for 2024 were up eight year-on-year to 146 aircraft, with Martel adding that supply chain will remain “a very sharp focus” and a “facing factor for [its] inventory profile as [Bombardier] manage inventory build”. Already documented issues with the supply chain were recognised by the General Aviation Manufacturer’s Association (GAMA)’s statement in the wake of proposed tariffs, believing they would “would affect the intricate and very complex global supply chain that can take years to establish given that it relies on suppliers with unique capabilities that are highly regulated and therefore cannot be easily replaced”. US tariffs (and potential reciprocating ones), continued GAMA, “could have an enormous impact with many unintended consequences within the industry”.
However, during recent customer discussions regarding new aircraft orders, Bombardier executive vice president and chief financial officer Bart Demosky suggested that with deliveries now targeting the latter half of 2026 or 2027, “that’s a long time between now and then, when you think about the risks of tariffs being in place”. Martel added: “Our customers are usually very sophisticated people, very knowledgeable about market and economy. And they see this as a very low risk of happening”.
Ultimately, however, “if we do end up facing this I am comforted by the fact that we are not the same company that we were in 2021 or even in 2021 and could navigate through any kind of challenges,” he concluded. “If it’s a 25% [tariff], if it’s a long duration, yes, we’re going to have to take action… but we are extremely prepared in the detail if ever this is necessary to pull the trigger on these scenarios. But again, we still believe [that] hopefully we won’t have to do that”.
Either way, with Bombardier refraining from providing 2025 guidance – something it says is the “most responsible and transparent thing to do” given ongoing uncertainties – “we plan to rase the bar again this year,” concluded Demosky. “Unfortunately, at this time, we lack the clarity to tell our investors exactly what will be happening. But make no mistake our company is moving forward with both confidence and purpose”.
