29-Apr-2016 10:59 AM
Bombardier C Series programme update
Bombardier reported (28-Apr-2016) the following highlights for its Commercial Aircraft programmes:
CSeries:
- Production for the C Series aircraft programme is accelerating, diluting the EBIT margin "as planned";
- During 1Q2016, free cash flow usage related to the C Series aircraft programme amounted to approximately USD200 million and remains in line with Bombardier's target of USD1.0 billion free cash flow usage for the programme in 2016;
- Recent significant agreements solidified the C Series aircraft programme in the 100- to 150-seat category:
- Signed a LoI with Air Canada for 45 CS300 CS300 aircraft. Deal is expected to be finalised in 2Q2016. The LoI includes options for an additional 30 CS300 aircraft, including conversion rights to the CS100 aircraft;
- Subsequent to end of 1Q2106, Bombardier signed a firm order with Delta Air Lines for 75 CS100 aircraft, with options for an additional 50 CS100 aircraft;
- Subsequent to end of 1Q2106, Air Baltic converted its remaining seven options to firm orders for the CS300 aircraft.
- These anticipated 127 firm orders are valued at USD9.9 billion, based on list prices. They "build confidence and reinforce Bombardier's five-year plan for the C Series aircraft programme";
- In conjunction with the closing of these firm purchase agreements, Bombardier will record an onerous contract provision of approximately USD500 million as a special item in 2Q2016;
- Bombardier remains on target to invest USD2.0 billion and achieve a break-even free cash flow for the C Series aircraft programme by 2020;
- Bombardier continues to prepare for the entry into service of the CS100 aircraft, with the first aircraft to be delivered to Swiss International Air Lines in Jun-2016.
CRJ:
- Subsequent to the end of 1Q2016, Chorus Aviation signed a firm purchase agreement for five CRJ900 aircraft. The order also includes purchase rights for an additional five CRJ900 aircraft. [more - original PR]