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Bombardier reports 57% rise in profits

Bombardier C-100 Bombardier jetBombardier
The CS100, one of Bombardier's C-Series jets at the centre of the trade row

Bombardier, the train and plane manufacturer at the centre of a trade row between the US, the UK and Canada, has seen a 57% rise in profits.

The US Commercial department had threatened to impose 292% tariffs on its C-Series aircraft which employs some 4,000 workers in Belfast.

But the US International Trade Commission (ITC) rejected the complaint which had been made by Boeing.

Now, Bombardier says it is moving "into a strong growth cycle".

Bombardier's earnings before interest and tax for the whole of last year rose from $427m (£304m) to $672m, driven by rising sales and profits in its rail division.

Loses at its commercial aircraft division fell from $417m to $377m and profits at its business aircraft division rose 13%.

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Bombardier One of Bombardier's high speed trains operating in SpainBombardier
One of Bombardier's high speed trains operating in Spain

More than planes...

Bombardier calls itself "the world's leading manufacturer of both planes and trains", but this statement is only true because of its dominance of the world of train systems. It remains a minnow besides Airbus and Boeing in terms of plane sales.

Its Transportation division is by far the largest of the group's operations, turning over $8.5bn last year. That makes it twice the size by revenue of its Business Aircraft division and almost four times the size of its Commercial Aircraft business, which includes the C-Series planes.

Its high-profile contracts include:

  • Zefiro high speed trains in Central and Northern Europe, North America and China
  • Metro vehicles in underground systems in London, New York, San Francisco, Delhi, China and Singapore
  • Monorails in Brazil, the US and Saudi Arabia
  • Trams and light rail systems in almost 100 cities in 20 countries
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US planemaker Boeing had originally complained that the C-Series had been sold to US airline Delta at "absurdly low prices", made possible by unfair subsidies to Bombardier from the British and Canadian governments.

The company is Northern Ireland's biggest employer. Heavy investment in the C-Series had already pushed Bombardier to the brink of bankruptcy in 2015 and the threat of tariffs looked likely to push it over the edge.

Following the original complaint, European planemaker Airbus bought a 51% stake in the C-Series project for just $1 and Bombardier agreed to set up a final assembly line in Mobile, Alabama.

Getty Images Bombardier demonstrators outside ParliamentGetty Images
The threat of tariffs on Bombardier jets threatened 4,000 jobs in Northern Ireland

Ruling

The ITC ruling, announced in January, was published on Thursday. It said that Bombardier's C- Series jets ordered by Delta did not compete with any of Boeing's planes and the sale did not come at Delta's expense.

"Boeing lost no sales or revenues," the ITC said in its 194-page ruling.

Bombardier is also in the middle of a five-year turnaround plan. Chief executive Alain Bellemare said: "2018 will be a pivotal year for Bombardier. We are moving out of our investment cycle and into a strong growth cycle."

"Because of this solid performance, we begin 2018 with great momentum. Our operational transformation is in full motion."