New order for CSeries puts end to drought

Bombardier Inc. has landed its first CSeries jet order in 18-months, a move the company says was bolstered by its blockbuster partnership with Airbus SE, but the company will deliver fewer jets than anticipated this year due to delays related to production ramp up.

The Montreal-based company said Thursday it will deliver between 20 and 22 CSeries jets to customers this year, fewer than the previously anticipated 30, as a result of engine delivery delays from Pratt & Whitney.

“This is a short-term issue that Pratt is actively addressing,” chief executive Alain Bellemare told analysts Thursday, adding that Pratt & Whitney has agreed to provide a cash advance starting next quarter for all aircraft that are built, but not delivered due to the delays.

Meanwhile, Bombardier said a European client that it did not identify signed a letter of intent for a firm order of 31 CSeries jets and an option for 30 additional aircraft. The firm order is valued at $2.4 billion based on list prices, Bombardier said.

The potential order comes at a crucial time for the company’s marquee jet program, which hadn’t secured a new sale in more than a year and faces the prospect of permanent massive 300-per-cent duties on its largest order to Delta Air Lines after rival Boeing Company filed a trade complaint.

Last month, Bombardier announced that aerospace giant Airbus SE will acquire a majority stake of its CSeries program, a big strategic move that the firm hopes will boost its struggling sales. Airbus has vowed that its supply chain expertise and sales network will help sell thousands of CSeries jets.

Bellemare said while the letter of intent resulted from an ongoing campaign prior to the announcement of the Airbus deal, the new partnership has helped provide some assurance of the longevity of the program.

“It is clear that Airbus coming into the program is adding confidence about the longterm success of the program,” he told analysts. “I wouldn’t say they are today totally linked, but it is clearly helping us to accelerate sales momentum.”

In a note to clients, National Bank of Canada analyst Cameron Doerkson said the announcement of the new order “will help solidify the value in the CSeries program.”