22 the conditions required to close the Asco deal, including approval from the European Commission, are unlikely to be met by the Oct. In a regulatory filing, Spirit said that as of Sept. It's a difficult time to do dealsĪlas, it now seems unlikely those deals will close as planned. The COVID-19 pandemic, and its impact on airline profitability and demand for new planes, has further pressured results and caused Spirit shares to lose nearly 75% of their value year to date.Īlthough Airbus has the same pandemic-related pressures as Boeing, demand for its A320 and A200 planes have held up better than the 737. Spirit makes the fuselage for the Max and has seen revenue plummet as the plane has remained grounded due to safety concerns. The push to diversify was driven in part by Boeing's 737 Max issues. The Bombardier assets include a significant amount of Airbus business.
In 2018, the company tried again at diversification, announcing plans to buy Airbus ( OTC:EADSY) supplier Asco Industries for $650 million and then last year the aerostructures business of Bombardier ( OTC:BDRAF) ( OTC:BDRBF) for $1.09 billion.
Early in its history, the company tried to diversify its business by acquiring mostly low-margin castoffs from other suppliers, and it spent the better part of the last decade shedding those units and strengthening its core business. Spirit is the one-time fuselage operation of Boeing, and the company still generates about three-quarters of its revenue from its former parent. The ramifications would set Spirit's growth back for years, and could reverberate through the entire commercial aerospace supply chain. Its latest effort, which showed great promise heading into 2020, appears to be unraveling during what is a chaotic time for commercial aerospace. Spirit has attempted a number of ill-fated efforts to diversify away from Boeing in the years since its 2005 spinoff.
When not arguing on Twitter or writing about the markets, Lou spends his free time out in nature, complaining online about the Baltimore Orioles or Watford FC, or listening to early 1990s alt rock.įollow as it will, Spirit AeroSystems Holdings ( NYSE:SPR) just can't seem to break free from former parent Boeing ( NYSE:BA). He spends a lot of time these days focused on the industrials and financials. Lou has followed the markets for more than two decades, developing extensive contacts including industry leaders, consultants, regulators, and labor representatives.
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