Bombardier Goes On Defense For Long-Term Growth
The U.S. Army’s search for a jet-powered surveillance aircraft concluded in March, but the platform was never in question. All three industry teams that submitted bids to the Army offered versions of the Bombardier Global 6000/6500, the emerging standard-bearer in the business-jet-class special missions market.
The Global 6000/6500 is leading Bombardier’s year-old campaign to revive a long-dormant role as a global defense contractor, with a long-term goal to triple the division’s annual revenue to $1 billion and perhaps develop or acquire the necessary skills to become a system integrator in the special missions market.
- U.S. Army selects the company’s Global 6500 as an airborne radar platform
- Bombardier campaigns for a CP-140 replacement contract
In addition to securing the Global 6000/6500 as the platform for the Army Theater-Level High-Altitude Expeditionary Next Airborne ISR Radar (Athena-R) contract—won by a MAG Aerospace-L3Harris Technologies team on March 16—Bombardier plans to deliver three Global 6000s to Lufthansa Technik, which will convert the jets into the German Air Force’s next signals-intelligence aircraft. Northrop Grumman also plans to convert several more Global 6000/6500 jets to join the U.S. Air Force fleet of E-11 Battlefield Airborne Communications Nodes.
Bombardier executives expect that more sales will be coming. About 375 aircraft are projected to be sold in the special missions market in the next decade, according to the company’s market forecast, released on March 23 during an investor day event. The company relaunched the Defense business unit last year as what it called an evolution of its former Specialized Aircraft division.
Most competing business jets now use composite structures in the wing and fuselage, rendering them more costly to modify with the antennas, pods and weapon stations needed for special missions. By contrast, the metal airframe and wings, long-range performance and ample supply of onboard electric power has made the Global 6000/6500 popular for military and government operators.
Growing the defense business now ranks as the company’s second-highest strategic priority, Bombardier CEO Eric Martel said during the industry day event, following maintenance of the medium-size Challenger 300/600 family and the large-cabin Global 6500/7500/8000 series for traditional business jet customers.
Although Bombardier’s defense sector is starting from a much lower base than the company’s commercial and aftermarket sales, Martel said it has an opportunity to grow significantly in the long term, if investors afford Bombardier the patience that military programs demand.
“Defense programs take a long time to operationalize,” Martel said. “We will be maximizing sales by making sure our efforts are focused and our teams are talking to the right people.”
An early test of the defense strategy is a prized contract to replace the Royal Canadian Air Force’s aging CP-140 Aurora fleet, which packages the Lockheed Martin P-3C Orion airframe with the mission system of the Lockheed S-3 Viking.
The Global 6500 offers the Canadian government a locally built platform to serve as the country’s next maritime patrol aircraft. But there is a catch: The Bombardier jet has never been modified for such a mission, so a multibillion dollar, yearslong development program is necessary. Canada recently requested an official offer from the U.S. government for 16 Boeing P-8As for the Canadian Multi-Mission Aircraft contract. The P-8A is the only “currently available” aircraft that meets Canadian requirements for anti-submarine warfare and surveillance missions, the government says in a March 27 news release, but notes no final decisions have been made.
Fearing that the Canadian government was poised to sign a P-8A order, Martel took the unusual step of publishing a warning on Dec. 22, saying that such a move would deprive local industry of a generational opportunity to develop a new product for domestic and export markets.
“A Canadian-built option should, and must, be considered on equal footing with those of foreign companies,” Martel wrote in December.
Meanwhile, Richard Shimooka, a senior fellow at the Macdonald-Laurier Institute, has proposed a compromise: a smaller order for P-8s augmented by smaller Bombardier jets. That approach would require the Canadian military first to define a strategy showing how the integrated fleet would operate, Shimooka wrote in a March 22 opinion piece in The Hub.
In the near term, Bombardier must partner with system integrators—such as Saab, Hensoldt or Northrop—to modify Challenger and Global jets into special mission aircraft. By 2025, a Bombardier financial plan that calls for achieving $900 million in annual cash flow would generate new options such as developing or acquiring the means to integrate mission systems onto aircraft itself.
“Eventually, this is a skill that we may want to acquire,” Martel said.