Bombardier has received a letter of intent from an unidentified European customer to acquire up to 61 CSeries aircraft, but delays to Pratt & Whitney engines have forced the airframer to cut its predicted 2017 deliveries of the airliner.
The letter of intent covers firm orders for 31 CSeries and options for another 30, says Bombardier. It expects to finalise a purchase agreement with the customer year-end, and puts the deal's total list-price value at $4.8 billion.
Bombardier made its CSeries disclosures as it posted a $117 million third-quarter net loss, bigger than the $94 million reverse in the third quarter of 2016.
But excluding interest and taxes, the company made a profit of $115 million in the period, up from $63 million a year earlier.
Bombardier now says it will deliver 20 to 22 CSeries aircraft in 2017, citing delays by Pratt & Whitney in delivery of PW1500G geared turbofans. Bombardier expects to deliver eight to 10 CSeries in the fourth quarter, and has delivered 12 CSeries so far this year, Flight Fleets Analyzer indicates.
The Canadian manufacturer has transitioned some engines earmarked for production aircraft into spare engines – a move aimed at supporting customers, it says.
In addition, it has signed a letter of intent under which P&W will provide Bombardier with "a supplier advance starting in the fourth quarter".
Bombardier says the advance reflects an excess of CSeries inventory resulting from engine delays. It expects to finalise the agreement with P&W by year-end.
Its revised delivery target comes after months during which Bombardier executives repeatedly and publicly insisted the company was on track to meet a goal to deliver 30 CSeries in 2017 – despite a much slower pace in actual deliveries.
The commercial aircraft division in the third quarter made a loss before interest and taxes of $95 million, improved from its $107 million loss in the same period of 2016. It generated revenue of $525 million, down 2% year-over-year.
Bombardier delivered 16 commercial aircraft in the third quarter, comprising five CSeries, four CRJs and seven Q400s. It received a firm order for 25 Q400s from SpiceJet.
The third-quarter results follow the 16 October news that Bombardier had reached a deal under which Airbus would acquire 50.01% interest in the CSeries programme.
No money will change hands when the deal closes, but Airbus will provide Bombardier with marketing, sales, procurement and other support – assistance that Bombardier says will buoy the aircraft's commercial appeal and spark more orders.
Executives expect the deal will close in the second half of 2018.
The "game-changing step" with Airbus "positions the CSeries programme for long-term commercial success and will generate new and sustainable value," Bombardier chief executive Alain Bellemare states in today's communique.
Bombardier's business aircraft division saw revenue decline 17% in the third quarter, to $1.1 billion, but its earnings before interest and taxes jumped 11% to $93 million.
In the third quarter, the fourth Global 7000 test aircraft entered flight testing, and the type remains on track to enter service in the second half of 2018, says Bombardier.
Source: Cirium Dashboard
