Delta to take Canadian-made jets until U.S. facility opens

Bombardier delivered 17 C Series aircraft in 2017

MONTREAL — Delta Air Lines said Thursday it will take delivery of Canadian-made C Series jets this year after Bombardier Inc. scored a big trade victory in the United States against Boeing.

The U.S. airline said it will accept the first of the 75 CS100s it ordered later this year from Canada until the Airbus/Bombardier facility in Alabama is up and running.

“The company is evaluating how to best match Bombardier’s production capacities with fleet needs,” it said in a news release.

Bombardier CEO Alain Bellemare told analysts that it plans to deliver to Delta aircraft assembled in Quebec until a U.S. assembly line estimated to cost $250 million to $300 million is built in Alabama.

“Clearly, the Delta aircraft are in the skyline for 2018, they have always been,” he said Thursday during a conference call.

The U.S. International Trade Commission ruled last month that the C Series hasn’t caused Boeing material harm even though the Department of Commerce ruled the planes are sold in the U.S. at less than fair value and are subsidized by the Canadian government.

The commission said in a report backing up its unanimous ruling that there is nothing stopping the Montreal-based company from delivering planes assembled in Mirabel, Que., to the American airlines.

The ruling overturned preliminary anti-dumping and countervailing duties totalling 292.21 per cent, although Boeing could appeal.

Bellemare said the ruling ends a year of turmoil.

“It will increase confidence for customers — existing and potential customers — and is very well received by the industry, the airlines, and consumers will benefit from it,” he said.

Bombardier delivered 17 C Series aircraft in 2017, below its forecast of 20 to 22 because of engine delivery delays from Pratt & Whitney.

The company trimmed its net loss in the fourth quarter as it approached the halfway point in its five-year turnaround drive.

The aerospace and railway manufacturer — which keeps its books in U.S. dollars — lost $109 million, compared with a loss of $259 million in the same quarter a year earlier.

Bellemare said the performance allows Bombardier to start the year with momentum.

“We have a clear line of sight to our 2020 objectives and we expect to reach free cash flow break even this year, a key objective of our five-year turnaround plan,” he told analysts.

Bellemare said 2018 will be a pivotal year as it moves from large investments in new aircraft to growth with the introduction of its Global 7000 business jet this year and completion of its C Series partnership with Airbus SE.

Bombardier’s quarterly revenue totalled $4.72 billion, up from $4.38 billion, but slightly lower than analysts’ expectations for revenue of $4.75 billion, according to Thomson Reuters.

For the full year, Bombardier lost $553 million, compared with a loss of $981 million in 2016.

It swung to an adjusted profit excluding one-time items of $63 million. Year-over-year revenues fell to $16.2 billion from $16.34 billion.