FAST FIVE
BOMBARDIER
It is and it’s an important goal for Bombardier. The aftermarket is one of our key growth areas, and another is the delivery of the Global 7500, which is ramping up. What is special about Bombardier’s aftermarket is that we have the largest fleet of any business jet OEM in the world—we have almost 5,000 airplanes flying today. That fleet is not only growing but it is also aging. That is why the size of aftermarket will grow to $4 billion in the next five years. It grows about 4% per year. So we have given ourselves an ambitious goal to increase our share of that growing market in next few years. To do that, we are deploying a strategy that is simple: we want to bring our jets home. We are building our infrastructure worldwide and are offering customers of all regions the possibility to have their maintenance done at a Bombardier facility. By increasing our presence worldwide, this is how we’ll grow to $2 billion by 2025.
We are going to increase our worldwide network by about 50% in the next 18 months. That will allow us to double the labor hours that we will apply ourselves to the Bombardier fleet. The expansion is truly worldwide. For the domestic U.S. market, the key investment we’re making is at the Miami Opa Locka Airport in Florida. We are building a 250,000 sq. ft. facility that will house up to 16 Global 7500s at any point in time. That will allow us to cater to more planes but also bigger planes. In Europe, Bombardier will have two large facilities where most Bombardier aircraft are—in the UK and Germany. In the United Kingdom, we are building a very large facility at the London Biggin Hill Airport, where we currently have a small presence. This facility will be ready in about a year. This airport is about a seven-minute helicopter ride from downtown London. At the same time, we bought out LBAS partner Lufthansa Technik so that the service center in Berlin now belongs entirely to Bombardier as of Jan. 1. In Asia, we already have service centers in Tianjin (a joint venture in China) and in Singapore, but we are about to quadruple the Singapore service center, which will become the headquarters of Bombardier in Asia. The Singapore service center will offer turnkey solutions. We are building a paint shop adjacent to the service shop. If you were a Bombardier customer in Asia before, you would’ve had to fly to the U.S. for a full refurb and a full repaint. Now you will be able to repaint the aircraft, redo the interior, install a new connectivity system with high-speed internet all in under one roof like a scheduled inspection. That will be ready this summer. Finally, in Melbourne, Australia, we’re building Bombardier’s first wholly-owned facility in Australia at Essendon Airport in the heart of Melbourne. It will allow us to provide OEM service in-country. That is smart so we can continue to grow our aftermarket business but also improve customer satisfaction. There are about 100 Bombardier aircraft in-country. So as you can see, this is a worldwide expansion and we are deploying significant resources to achieve this 50% growth in our infrastructure.
We don’t disclose that. But investing in the aftermarket infrastructure is a smart thing because the capital investments required in our aftermarket business are very low compared to the level of returns that we expect. So it makes good business sense to invest in services not just because it helps grow an important part of our business but also because it increases customer satisfaction, which leads them to buy more Bombardier products.
Yes, because customers expect OEM service centers to provide scheduled and unscheduled maintenance, but also provide upgrades whether it’s connectivity or performance-related, repaint and interior changes. Our strategy is to offer all of these services under one roof, which is why we’re building such large facilities. What you’ll see from us is a drive to provide tip-to-tail capabilities at all of our service locations worldwide.
They are changing. As a direct result of increased capacity, we can consider new areas in which to be involved. When you can house 300 Bombardier aircraft simultaneously worldwide across these facilities, you can be more active in some areas of the lifecycle that we were not as active in before. An example of that is preowned aircraft transactions. By having so much capacity worldwide we can be involved in more transactions and we can offer more upgrades during them. We not only will be very active in a traditional sphere of scheduled and unscheduled maintenance, but we’ll be able to start getting active in pre-owned inspections and being involved at the end of an aircraft’s life, which is another byproduct of the investments that we’re making. We’re excited about this because we think that our customers will welcome the OEM being more present in their ownership experience
