In a strategic move to bolster its presence in the United States, Bombardier Inc. has announced its acquisition of Velocity Maintenance Solutions, a jet service provider based in Wilmington, Delaware. This deal, which includes a 35,000 square-foot hangar and a fleet of 14 mobile repair trucks, comes despite looming threats from the U.S. government that could jeopardise the Canadian aerospace giant’s operations in the region.
A Calculated Expansion
Bombardier’s purchase of Velocity reflects the company’s ongoing commitment to enhance its aircraft service capabilities. The transaction, details of which were not disclosed, aligns with Bombardier’s five-year recovery plan unveiled in 2021. This comprehensive strategy aims to solidify Bombardier’s global market share in aircraft sales while simultaneously reducing costs and paying down debt. In the most recent quarter, Bombardier reported a revenue boost of US$590 million from its services sector, which constitutes approximately 26 per cent of its total revenue of US$2.3 billion.
The acquisition of Velocity is part of Bombardier’s broader ambition to expand its network of service centres. In recent years, the company has demonstrated its appetite for growth, including the full ownership of a service facility in Berlin after acquiring shares from Lufthansa Technik and ExecuJet Aviation.
Political Headwinds
However, Bombardier’s expansion plans face an uncertain backdrop due to recent statements from U.S. President Donald Trump. Last month, Trump declared via social media that the United States would decertify Bombardier’s Global Express jets and all aircraft manufactured in Canada unless Canada grants certification to Gulfstream’s new business jets. This announcement sent shockwaves through Canada’s aerospace sector, raising concerns about the potential introduction of a 50 per cent import tariff on Canadian planes entering the U.S. market.
Industry experts have voiced their concerns, noting that Trump’s declaration lacks legal grounding, as he cannot unilaterally decertify aircraft. Bryan Bedford, the head of the Federal Aviation Administration (FAA) and a Trump appointee, has refrained from confirming whether the agency will take action against Canadian-made aircraft, which also include models from Airbus and De Havilland.
Government Responses
In response to the situation, Canada’s Transport Minister Steven MacKinnon has actively engaged with industry stakeholders to clarify the aircraft certification process. He reassured reporters that Transport Canada operates independently and that there has been ongoing communication with both manufacturers and industry representatives to ensure transparency during this tumultuous period.
“We’re communicating with both of the manufacturers and all the people in the industry to make sure that everyone understands the timeline,” MacKinnon stated last week in Ottawa. “To the extent that any ambiguities or misunderstandings may have existed, I think they’ve been dissipated.”
As Bombardier prepares to release its financial results for the fourth quarter, the company remains focused on its ambitious plans for U.S. market expansion, including the establishment of a new service point in Fort Wayne, Indiana. With existing service centres situated in major cities such as Dallas, Tucson, Hartford, Wichita, and Miami, Bombardier is poised to increase its footprint across multiple states.
Why it Matters
Bombardier’s acquisition of Velocity Maintenance Solutions is not just a business transaction; it signifies the company’s resilience and determination to navigate a complex political landscape. As the aerospace industry faces mounting pressure from regulatory and tariff threats, Bombardier’s proactive approach to expanding its service capabilities could prove pivotal in sustaining its competitive edge. The outcome of this situation will be closely watched, as it has implications for both the Canadian and U.S. aerospace sectors, and could set a precedent for future cross-border trade relations.
