Low demand for corporate aircraft and small airliners has led New York-based financial advisor Moody’s Investors Service to review, and possibly downgrade in
the next two months, certain Bombardier debt ratings. Bombardier Aerospace’s intermediate-term earnings and cash flow could be constrained by any adverse market effects, according to Moody’s corporate finance group senior vice president Tassos Philippakos.
The exercise takes account of “the weak business jet market and the potential for pressures on [Bombardier’s] currently healthy regional jet (RJ) business as a result of deteriorating performance of U.S. airlines, which [represent] a large part of its RJ backlog.” While the down cycle is expected to be less severe for the RJ market than for the overall commercial aircraft business, analysts are considering how airline difficulties could alter future delivery forecasts. They also note that continued pressure on aircraft prices could damage Bombardier’s aircraft portfolio.
