Bombardier exec blasé on Ottawa’s billion
COMPANY, OTTAWA REPORTEDLY IN TALKS FOR $1B IN FUNDING
Bombardier Inc.’ s funding talks with the federal government are “progressing to plan,” but the company will be just fine even if it doesn’t receive any support, according to the head of the CSeries program.
“We don’t need a backup plan because what’s secured already is actually more than we require,” Rob Dewar, vice- president of Bombardier’s CSeries aircraft program, said in a phone interview from Zurich, where he was meeting with officials from Swiss International Air Lines.
“We have secured all the funding required to ramp up the CSeries program and also for the rest of aerospace. Really, the federal funding would just be an extra endorsement for the program. … That’s really just an extra bonus that would be helpful but is very clearly not required.”
Bombardier has asked Ottawa for US$ 1 billion, which would match the investment made by the Quebec government in October. In exchange, Quebec got a 49.5 per cent stake in the CSeries program, which has struggled to generate new orders amid delays and cost overruns.
Bombardier also received US$ 1.5 billion from Quebec’s pension fund, the Caisse de dépôt et placement du Québec, in exchange for a 30 per cent stake in the company’s train-making business. Bombardier said that money would give it the financial cushion it needs to complete development of the CSeries as well as two new ultra-long-range business jets.
Bombardier needs US$2 billion to carry the CSeries through until it starts generating positive cash flow in 2020-21.
There was no funding for Bombardier in Tuesday’s federal budget, but Dewar said the discussions with Ottawa are “progressing well.”
‘That’s really just an extra BONUS that would be HELPFUL but is very clearly NOT required’ vice-president —Rob of Dewar, Bombardier’ s CSeries aircraft program
“The feedback I have had from the Bombardier side is positive,” he said.
When asked if he was surprised at the fierce national debate the funding request has provoked, Dewar said, “We didn’t think we’d be so popular. I’ll leave it at that.”
Bombardier announced Wednesday that the smaller CS100 has completed its European route-proving program — essentially, a series of flights that mimicked the commercial operations of its launch operator, Swiss International Air Lines.
“As the launch customer and the first airline to operate the CSeries aircraft, we are very pleased and impressed with the results,” Peter Wojahn, chief technical officer at Swiss, said in a statement.
The CS100 should receive certification from the European Aviation Safety Agency in May, then will be delivered to Swiss in June and will begin flights as early as July, Dewar said.
The l arger CS300 has completed 75 per cent of its flight testing and is on track to receive its Transport Canada certification in June, with delivery to its first customer, AirBaltic, planned for the second half of the year.
It has been a turbulent few months for Bombardier. A tentative order from Air Canada for up to 75 CS300 j ets gave t he company’s stock price a much- needed boost when it was announced in February.
However, that deal was accompanied by news that the company would cut 7,000 jobs, or about 10 per cent of its global workforce, as CEO Alain Bellemare works to bolster its debt- ridden balance sheet.
There were reports that Air Canada got a very good price for the jets, but Dewar denied that.
“It was very competitive and a challenging agreement that was based on the technical merits of the aircraft,” he said.
Meanwhile, Bombardier’s biggest CSeries customer filed for bankruptcy protection last month. Republic Airways Holdings Inc., which has placed a firm order for 40 CS300s with options for 40 more, cited a pilot shortage that has weighed on revenue.
Dewar said Bombardier is “monitoring the situation,” but stressed that the CSeries production l i ne is f ully booked through 2018 even without the Republic order.
He declined to provide specifics about Bombardier’s discussions with other potential CSeries customers, but said “more concrete things are coming.”
“We’re engaged with a large number of customers and I would say that it’s progressing very well,” he said. “Stay tuned.”
WE DIDN’T THINK WE’D BE SO POPULAR. I’LL LEAVE IT AT THAT.