Aerospace Industry Profits to Rise By 77 Per Cent in 2005

Three consecutive years of double-digit growth in manufacturing shipments, combined with on-going efforts to control cost increases, are expected to translate into a 77 per cent increase in profits for Canada's aerospace industry in 2005, according to the Conference Board's Industrial Outlook: Canada's Aircraft and Aircraft Parts Industry.

"The Canadian industry depends on the health of the world's major airlines, and there is reason for cautious optimism in the global aviation industry. Despite ongoing turmoil at some U.S. carriers and the high price of oil, restructuring in the air transport industry and strong global economic growth should mean an improved outlook for airlines," said Louis Thériault, Associate Director, Industrial Outlook.

Profit levels are expected to jump from $766 million in 2004 to $1.4 billion in 2005. A rise in production at key companies such as Bombardier, General Electric and Pratt & Whitney will lead to higher profit levels this year and next. Over the medium term, both profit margins and levels are forecast to increase.

Despite difficulties facing some of its customers, Bombardier has received new orders since the beginning of 2005-and its outlook is brighter for 2006 and over the medium term. Solid corporate profits are expected to
increase demand for Bombardier's business aircraft, a successful market segment for the company. Bombardier could also gain a strong presence in a potentially lucrative market with its planned C Series of larger 110-to-130-seat regional jets.