Bombardier slashes CSeries delivery forecast

The aerospace giant will only deliver seven of the aircraft this year — not the 15 it had expected.

0 September 7, 2016
The Canadian Press
by Ross Marowits, THE CANADIAN PRESS

MONTREAL — Bombardier is slashing deliveries of its new CSeries plane by more than half this year because of delayed engine deliveries from Pratt & Whitney, marking another setback for the jet.

The Montreal-based company said Tuesday it will deliver seven of the aircraft this year — not the 15 it had expected.

Bombardier CSeriesNeither Bombardier nor Pratt & Whitney specified what was behind the delays, but Bombardier commercial aircraft president Fred Cromer said the engines on the CSeries aircraft that were put into service earlier this summer were performing well.

“We are very confident in our production ramp-up plan, including our ability to meet our production goal of 90 to 120 aircraft per year by 2020,” he said in a news release.

Still, Bombardier warned that revenue this year will be at the low end of its forecast range, which is between US$16.5 billion and US$17.5 billion, as a result of the delays.

Pratt & Whitney said there was no problem with the engines, but declined to say what was causing the delays.

“We’ve made significant headway in the supply chain, but there is some pressure on new engine deliveries for this year,” the U.S.-based company said in a statement.

The geared turbofan engine is a key feature of the CSeries. It is quieter, more fuel efficient and generates fewer emissions than comparable engines.

The CSeries program, which is 2 1/2 years behind schedule and more than $2 billion over budget, has faced a number of struggles.

An engine fire during testing in May 2014 delayed the program for more than three months.

The latest delay will affect deliveries to Swiss International Air Lines and airBaltic. Bombardier expects financial compensation from Pratt & Whitney to offset penalties it will have to pay to the two airlines.

Swiss International Air Lines has two CS100 planes in service with a third jet to be delivered next month and three more by the end of the year. The larger CS300 is expected to enter service with airBaltic in the fall.

Bombardier said Pratt & Whitney’s efforts to speed up engine deliveries by the end of next year should allow it to get back on track.

Bombardier spokeswoman Marianella de la Barrera said the delay should have no impact on its workforce or its ongoing CSeries sales efforts. It has received 370 firm orders plus 380 options and expressions of interest, she said.

“Supplier ramp-up issues in the early onset of a program are not unusual so we do have contingencies we work around,” she said.

Analyst Walter Spracklin of RBC Capital Markets said the aircraft’s performance is more important at this stage of the CSeries project.

“The key will be if this becomes a recurring development or whether Bombardier and its suppliers can effectively meet its delivery requirements on an ongoing basis,” he wrote in a report.

A spokesman for federal Economic Development Minister Navdeep Bains said Ottawa wants to resolve Bombardier’s US$1-billion funding request, made nearly a year ago, and is seeking to guarantee the company’s head office remains in Canada and that Canadian jobs are preserved.

“We haven’t found that solution yet with them but the conversations are going on with the company and government,” said Philip Proulx.

Bombardier received the final instalment of Quebec’s US$1-billion investment in the CSeries program last week. In exchange, the provincial government owns a 49.5 per cent stake in the CSeries program.

News from © Canadian Press Enterprises Inc. 2016

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