GRAHAM WARWICK / WASHINGTON DC
Backlogs at Bombardier and Embraer also fall, but Brazilian company's cash position improves as customers repay debts
The recently ended strike at Bombardier overturned the company's plan to increase regional jet deliveries in its first quarter. The three-week stoppage at its Montreal aerospace plants reduced CRJ deliveries by between eight and 10 aircraft and will cost the Canadian company around C$85 million ($55 million) in first-half earnings. Regional jet deliveries also fell at rival manufacturer Embraer.
Bombardier delivered 37 regional aircraft in the quarter ended 30 April, down two from the same period last year. The company also delivered 28 business jets, down from 44, but its aerospace revenues stayed relatively stable at C$2.6 billion because of the higher proportion of larger aircraft delivered. Pre-tax income at the aerospace group fell 39% to C$191 million because of the strike.
At Embraer, first-quarter revenues declined 27% to $558 million as deliveries slowed to 30 aircraft from 42 in the same period last year. Net income slipped 31% to $74 million. Backlogs at both manufacturers fell, although Bombardier booked orders for six CRJs in its first quarter. Its backlog of Dash 8 turboprops narrowed to 31 aircraft from 57 a year ago. Bombardier still expects to deliver 190 CRJs in the financial year ending 31 January, and Embraer says it is still on track to deliver 135 jets this year.
Embraer's cash position, hurt by the interim customer financing required to shore up regional jet deliveries towards the end of last year, improved in the first quarter. The Brazilian manufacturer ended the quarter with $38.5 million in cash, compared with a negative $23 million at the end of 2001, and says this should increase to $400-500 million by the end of the second quarter as customers begin to repay interim financing. Commercial aircraft financing by Bombardier's Capital arm increased to C$700 million from C$400 million at year-end, but the company described this as "normal" for the first quarter.
Bombardier says demand for CRJs is strong and interest in its larger business jets is picking up, but the markets for regional turboprops and smaller business jets remain weak.
Source: Flight International
