F_I_2015_02_17_23_

THIS WEEK

flightglobal.com 17-23 February 2015 | Flight International | 11

Northrop

makes clean

sheet T-X pitch

THIS WEEK P

A

reshuffled leadership team
has outlined a three-point
plan for shoring up Bombardier’s
finances as its CSeries develop-
ment activity continues, and
opened the door to selling more
of the company’s businesses.
Alain Bellemare will complete
a leadership change launched
last August by replacing Pierre
Beaudoin as chief executive.
Beaudoin will become corporate
chairman, replacing his father
and 50-year veteran, Laurent,
who will remain on the board of
directors as chairman emeritus.
The sea change on the leader-
ship team comes as analysts warn
that Bombardier faces a financial
crisis, with only $2.4 billion in
cash and a $750 million bond cov-
enant due next January. Ratings
agencies Fitch and Moody’s have

warned that its credit rating could

be downgraded to junk status if the

cash balance falls below $2 billion.

So far, Bombardier has raised

cash by making relatively small

divestitures, such as selling off

the Flexjet fractional business jet

service and a military training

and simulation unit to CAE. But

it appears that the company is

now looking at making bolder

moves to raise cash.

Firstly, it will issue new shares

worth $600 million, if a two-

thirds majority of shareholders

approve the plan at a special

meeting in March. Beaudoin fam-

ily members control about 58% of

the company’s shares and already

approve the plan, it says. The next

step will seek to raise up to $1.

billion in loans, and although

some analysts are sceptical that

A

bout 14% of pilots flying for
European airlines are self-
employed or work for temporary
work agencies (TWA), according
to a European Commission-fund-
ed study by the University of
Ghent, which notes that this pro-
portion is growing.
Carried out between September
and November 2014, the study re-
ceived responses from 6,
pilots – around 10% of the known
European professional pilot popu-
lation. The largest group of re-
spondents were between 30 and
40 years old and had more than 10
years’ flying experience.
Some 5.4% of those in what
Ghent terms “atypical employ-
ment” have a contract with a
TWA, and 72% of those had a
fixed-term contract with the

agency. “Many report being paid

per hour without a minimum

number of flights guaranteed,”

says the study.

Among all the pilots in “atypi-

cal employment”, 70% work for

low-cost carriers, and the majori-

ty of those are at the younger end

of the age range. The study found

that respondents working in

business aviation also “tend to be

self-employed more often than

their colleagues working for net-

work or regional airlines”.

The university remarks that as

a large proportion of self-

employed pilots work only for

one company, this “could be con-

sidered as an indicator of bogus

self-employment”, as their con-

tracts require them to work exclu-

sively for a single carrier.

“The majority of flight crew

directly employed in a network

airline stem from another era:

they have 20-25 years of experi-

ence and have witnessed the

deregulation of the aviation mar-

ket. They were recruited in a

different time: a time where an

open-ended labour agreement

concluded directly with the

airline was the typical employ-

ment relationship.” ■

70% of pilots in “atypical employment” work for low-cost carriers

Rex Features

Self-employment trend on rise for European pilots

STUDY DAVID LEARMOUNT LONDON

banks would be willing to offer

loans on favourable terms, Bom-

bardier officials are optimistic the

debt can be issued successfully.

The final element in the financ-

ing plan could be the most dramat-

ic. Bombardier could “participate

in industry consolidation”, said

Pierre Beaudoin, during a 12 Feb-

ruary earnings call. He says this

phrase opens the door to both ac-

quisitions and divestitures, but ac-

knowledges that the company’s

overall goal is to reduce debt, rath-

er than spend money. The new fi-

nancing plan also follows a deci-

sion to pause the Learjet 85

programme last month, and accept

a $1.3 billion impairment charge.

Bombardier also confirms for-

mer turboprops vice-president and

general manager Simon Roberts

has left. Control of Q400 turboprop

operations has passed to Alain

Dugas, chief operating officer of

Bombardier Commercial Aircraft.

Meanwhile, the CSeries test pro-

gramme has completed about

1,000 flight hours – about 40% of

the 2,400h planned when flight

testing began in September 2013.

The CS300 is within a “few weeks”

of first flight, Beaudoin says.

Full-year earnings for 2014 be-

fore special items were up by

12% to $437 million, while Bom-

bardier Aerospace’s revenues rose

by nearly 12%, to $10.5 billion. ■

STRATEGY STEPHEN TRIMBLE WASHINGTON DC

Bellemare comes

in as Bombardier

fights to survive

New management to look at divestments or consolidation
with Pierre Beaudoin stepping aside for new chief executive

The CSeries has completed about 1,000 flight hours of testing

Bombardier