Globe says Bombardier earnings guidance revision looms
Bombardier Inc BBD
Shares issued 1,029,755,782 Dec 5 close $5.16
Fri 6 Dec 2002 In the News
The Globe and Mail reports in its Friday edition that UAL's woes may cause
trouble for Bombardier. The Globe's Paul Waldie writes that UAL, parent of
United Airlines, lost a bid to receive nearly $2-billion (U.S.) in
government assistance this week, and most analysts say bankruptcy
protection, and possibly liquidation, is now inevitable. Bombardier has
deals to deliver 135 jets, worth about $3-billion (U.S.) in total, for
United's regional services, SkyWest, Atlantic Coast Airlines Holdings and
Air Wisconsin Airlines. Those airlines are not owned by United, however, it
controls their schedules and dictates where they fly. Given United's
control over the regionals, "if UAL doesn't need the aircraft in its future
plans, we believe these regionals will defer or cancel orders if they
cannot find other airlines for which to fly the planes," said Credit Suisse
First Boston analyst Jim Higgins. He noted that the orders represent about
half of Bombardier's deliveries of 50-seat regional jets. "We believe the
possibility exists that Bombardier will withdraw its earnings and free cash
flow guidance for this year pending further discussions with its
customers," said Mr. Higgins.
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