Bombardier locks in 75-plane deal with Delta, its largest CSeries order to date
Firm $5.6 billion order includes options for up to 50 additional planes, bolstering company's sales tally as it posts quarterly loss
MONTREAL—Bombardier says Delta Air Lines Inc. has placed a firm order for 75 CS100 aircraft with options for an additional 50 more in what would be the largest order for the troubled CSeries passenger jet program.
The Montreal-based company says based on the list price, the firm order is valued at approximately US$5.6 billion.
Delivery of the aircraft to Delta is expected to begin in 2018.
“Given Delta’s position as one of the world’s largest and most respected airlines, this deal is a strong endorsement of the CSeries as the best performing aircraft in the 100-150 passenger class,” Bombardier chief executive Alain Bellemare said in a statement April 28.
“The addition of Delta to our marquee CSeries customer list gives us tremendous momentum as we approach entry-into-service this summer.”
Bombardier has been at the centre of much political controversy in recent months and it is banking on the success of its CSeries jets to revive its fortunes.
The order came as Bombardier, which keeps its books in U.S. dollars, reported a first-quarter loss attributable to shareholders of US$161 million or seven cents per share. That compared with a profit attributable to shareholders of US$98 million or five cents per share a year ago.
Revenue for the quarter fell to US$3.14 billion compared with nearly US$4.4 billion in the first three months of 2015.
“We delivered on our commitments for the first quarter and we remain on track to achieve both our 2016 guidance and 2020 goals,” Bellemare said.
The company has been offered a US$1 billion lifeline from the Quebec government for its CSeries planes, though the first of two payments has been delayed due to unspecified issues including liquidity, according to Premier Philippe Couillard.
The aerospace and transportation manufacturer has also asked Ottawa to match Quebec’s funding, a request the federal government has said it is carefully studying since it was made in December.
The governments of Quebec and Ontario, both provinces where Bombardier has an extensive presence, have also urged Ottawa to provide financial assistance.
In reporting its results Thursday, Bombardier said with the investment by the Quebec government it has enough cash to execute its plan, but additional money would increase its flexibility.
The CSeries program is two years behind schedule and has incurred about US$2 billion in cost overruns.
But Bombardier has signed deals in recent months to sell the planes, including a letter of intent in February where Air Canada would buy 45 CSeries jets, with an option to purchase up to 30 more of the aircraft.
Swiss Airlines is scheduled to be the first carrier to put the plane into commercial service in July.
The company said that as a result of the Delta order, the CSeries is expected to enter into service with a backlog of more than 300 aircraft.
Bombardier is also set to hold its annual general meeting Friday.