Bombardier will continue mulling a split-up of the Canadian train and business jet maker, with the company’s chief executive sounding like he favors staying in the latter business, according to comments made during a Feb. 13 teleconference.

“Our transformation in aerospace is largely complete,” Bombardier CEO and president Alain Bellemare said, referring to the company’s Feb. 12 sale of its 31% stake in the A220 to Airbus for $591 million. The sale completes Bombardier’s exit of commercial aviation. “For Bombardier, our future in aerospace is with our industry leading business jet franchise and we see tremendous opportunities.”

By jettisoning the A220 completely, including once-future spending commitments of $700 million that Bombardier previously owed Airbus, Bellemare said Bombardier was on firmer footing for deciding what to do with either of its two main divisions, rail and business aviation. The company is widely reported to be talking with Europe’s Alstom and the U.S.’s Textron over dealmaking, respectively. 

“We feel very good with the completion of our move of the A220 into Airbus. It gives us plenty of liquidity,” Bellemare said. “We have very strong assets, we have a strong cash position, and we’re going to do it the right way.”

Nevertheless, Bellemare was forced to reconcile optimistic comments on the company’s general outlook and specific bizav positioning with analyst suspicion that events have superseded Bombardier’s five-year turnaround plan from 2015. 

“I’m very confused as to what the strategy of the company is,” analyst Noah Popnak of Gold Sachs told Bellemare during the call. The challenged programs in rail are making progress, several high-margin businesses have been sold off, the rest of A220 was sold for lower than expected and lower than what Bombardier accounted for on its books. Then there are the reported Alstom and Textron talks.

“It’s starting to look more like an asset liquidation than a turnaround,” Poponak continued. “Has this always been the plan? Why is there this quick look to do all of this [dealmaking] if the business is turning around?”

Bellemare said the simple answer is the “balance sheet” and the need to deleverage the company. “The strategy was always to exit commercial aircraft, and we’ve done that very successfully,” he continued. “We’re ending up with two very strong franchises, the train side and the business aircraft side, [plus] a strong cash position and we have options. And we’re going to continue to look at our options to see if there are ways we can accelerate the deleveraging phase of the turnaround plan.”

Bellemare further denied the reported dealmaking was urgent in nature; instead, he termed it “proactive.”

In 2019, Bombardier delivered 142 business aircraft, including 54 Global, 76 Challenger and 12 Learjet aircraft. Deliveries included 52 business jets in the fourth quarter, partially due to an increase in Global 7500 deliveries. In 2018, Bombardier delivered 137 business jets, including 41 in the fourth quarter. 

Its business aircraft backlog at year end increased slightly to $14.4 billion.

Bombardier’s full-year 2019 results met lowered expectations that Bombardier outlined Jan. 16 when it warned investors of financial disappointment, analysts said. However, year-over-year comparisons were difficult because of several moving parts in Bombardier’s business portfolio. Last year, Bombardier acquired Global 7500 wing work from Triumph Group, sold bizav training work to CAE, completed a previously announced sale of Q400 aircraft to De Havilland Aircraft, struck a deal to sell its Canadian Regional Jet (CRJ) to Mitsubishi Heavy Industries, and signed a deal to sell aerostructures activities and aftermarket services operations in Belfast, U.K. and Casablanca, Morocco, to Spirit AeroSystems.