Bombardier made a $490 million net loss in the second quarter, after a positive figure of $125 million in the same period of 2015, on 7% lower revenue – but points to a more profitable future after closing a series of "pivotal" deals with two airlines on the CSeries aircraft programme.
The Canadian manufacturer says revenue contracted by $311 million year-on-year, to $4.31 billion, as a result of planned reductions in business aircraft deliveries.
In its commercial aircraft segment, it achieved a book-to-bill ratio of 5.9 in the second quarter. Three airlines – Air Baltic, Delta Air Lines and Air Canada – signed orders for a total of 127 aircraft in the three months ended 30 June, which caused Bombardier to record a $492 million loss-making provision.
"This was a pivotal quarter for the CSeries as both variants are now certified and the programme has begun generating revenue," says Bombardier chief executive Alain Bellemare.
The new orders were offset by a change in the terms of Ilyushin Finance's contract. Instead of buying 32 CS300s, the lessor will now acquire 20 CS300s and one Q400 turboprop.
Bombardier is meanwhile monitoring the bankruptcy proceedings of Republic Airways Holdings, which has a firm order for 40 CS300s.
Revenue in the commercial aircraft segment soared 28% to $764 million on 27 deliveries, including the first CS100 – handed over to launch customers Swiss – which entered revenue service on 15 July. The first CS300 is set to be delivered to Air Baltic in the fourth quarter.
Bombardier closed a $1 billion investment by the Quebec provincial government at the end of the second quarter. The first $500 million was transferred on 30 June to a newly created joint venture named the CSeries Aircraft Limited Partnership (CSALP). Another $500 million instalment is to be delivered by Quebec on 1 September. Bombardier has also been seeking a $1 billion investment in CSALP from the federal government in Ottawa, but has said the additional funds are not necessary to complete a five-year plan to break even on the CSeries programme.
The CSeries production ramp consumed $490 million in free cash flow in the second quarter, contributing to a total expense of $808 million in the first six months. Bombardier adds the CSeries is on track to consume a total of $1 billion in free cash flow across the full year 2016.
Source: Cirium Dashboard
