Short Brothers' new US owner reports £136m operating loss for third quarter
THE new parent owner of the former Bombardier operation in Northern Ireland has a reported a $711 million (£547m) operating loss for the first nine months of 2020.
Kansas-based Spirit AeroSystems, which completed the cut-price acquisition of the former Short Brothers business in Belfast last week, reported a $177m (£136m) operating loss for the third quarter of 2020 as Covid-19 continued to wreak havoc on the aviation industry.
The US aerospace giant reported a 58 per cent fall in year-on-year revenue for the third quarter to $806m (£620m). It left the group with a revenue of $2.5bn (£1.9bn) for the first nine months of 2020, 57 per cent behind the same period in 2019.
Spirit’s production had already been hit prior to the coronavirus pandemic as a result of key customer Boeing having to ground its new 737 MAX fleet.
Spirit’s president and chief executive Tom Gentile said the company had raised $900m (£692m) in a bid to stablise the group’s liquidity. Spirit also terminated a $420m (£323m) deal to buy Belgian aerospace component maker Asco and secured a significant reduction in the cash it paid Bombardier for its Northern Ireland business.
The US group had originally agreed a deal involving $500m (£384m) cash consideration, but was able to negotiate a $275m (£211m) reduction in the wake of the Covid-19 crisis.
The deal also included Bombardier’s aerostructure’s operation in Morocco.
Mr Gentile said the three steps had improved Spirit’s cash position and had enhanced its ability to respond to future challenges.
“The Bombardier acquisition also accelerates our strategic transformation by securing a significant amount of Airbus work, boosting our aftermarket business, and enhancing our competitiveness with the addition of low-cost operations in Morocco,” he said.
Spirit AeroSystem’s third quarter results also notes that as of September 30 2020, the net pension liabilities of the Shorts Brothers plc pension scheme assumed were approximately $300m £230m), “which is expected to be reduced after payment of a special contribution of £100m upon the one-year anniversary of closing”.
Spirit also agreed to assume liabilities of $290m (£223m) from an investment agreement with the Department for Business, Energy and Industrial Strategy in London.