Bombardier Inc said on Thursday it would end production of its Learjet business aircraft in 2021 and slash about 1,600 jobs to cut costs, after reporting an adjusted loss before interest and taxes for the fourth quarter, as the COVID-19 pandemic hit demand.
Bombardier announced broader cost-cutting efforts to improve operating profits in 2021, after flagging likely layoffs in November. The company is becoming a pure-play business-jet maker following its recent rail division sale to French train maker Alstom SA .
Bombardier said it would end production of its weak-selling Learjet corporate aircraft later in 2021 to focus on the more profitable Challenger and Global jets.
Montreal-based Bombardier reported a 19.7% fall in business jet deliveries in 2020, in line with broader industry trends, but said 2020 revenues from corporate aircraft activities rose 3%, helped by year-end deliveries of its flagship Global 7500, and a rebound in demand.
Bombardier reported 2020 free cash flow usage from continuing operations of $1.9 billion, partly hit by pandemic-related disruptions, but expects to reduce cash burn in 2021 to better than $500 million.
Bombardier has evolved from a plane and train maker to business jet maker, shedding assets to restore profitability and cut debt, after facing a cash crunch in 2015 while bringing a commercial plane to market.
The company said it now has pro forma cash and cash equivalents of about $5.4 billion, including the proceeds from the sale of its transportation unit, and a pro forma net debt of about $4.7 billion.
The company reported an adjusted loss before interest, taxes of $165 million for the quarter ended Dec. 31, compared with a profit of $168 million a year earlier.
Business jet deliveries of the company, which will host its Investor Day on March 4, fell to 114 units in 2020 from 142 in the previous year.
The company expects Adjusted EBITDA of more than $500 million in 2021. Analysts on average estimate it to be $661.3 million, according to Refinitiv IBES data.