Bombardier reveals order for 31 C Series in deal worth Â£1.8 billion
Canadian planemaker Bombardier has announced a significant boost with the sale of 31 C Series jets in a deal worth Â£1.8 billion to an as yet unamed Eurpoean operator.
A letter of intent signed between the two firms also includes options on 30 further aircraft which, if taken up, would lift the total price to almost £3.6bn.
The deal was confirmed as part of Bombardier’s third quarter results but the report also revealed that the firm is facing difficulties completing the groundbreaking aircraft because of a “short term” delays in the delivery of engines from US firm Pratt and Whitney.
The sale is the first announced since Airbus agreed to acquire a controlling stake in the C Series programme last month and though the figures indicate a net loss of US$117m on turnover of $3.8bn, chief executive Alain Bellemare was upbeat.
“This significant new order confirms the increasing confidence customers have in the C Series.”
“Looking forward, as Airbus joins the programme, and with the C Series continuing to prove itself in service, we expect sales momentum to accelerate quickly.
“This is a game-changing step for Bombardier. It positions the C Series program for long-term commercial success and will generate new and sustainable value for our customers, suppliers and shareholders.”
The news provides some light relief for the business and in particular in Belfast where up to 1,000 of 4,200 employees are involved in the development and manufacture of C Series wings.
Nevertheless the firm faces several critical hurdles, not least the ongoing trade dispute with US giant Boeing .
Triggered by a deal with US airline Delta the US Department of Commerce has imposed crippling tariffs on the planes following Boeing allegations that Bombardier had used Canadian government handouts to massively undercut the true price of the jets in an anti-competitive move against Boeing.
Final judgements on those two complaints are due in February but Bombardier must also await judgement on its proposals to construct C Series planes for the US market at an existing Airbus plant in Mobile, Alabama.
Last week the Belfast division announced it was cutting 280 jobs as part of Bombardier’s ongoing cost cutting programme but Mr Bellemare said that was starting to show results.
“We also continue to make solid progress executing our turnaround plan, and are very much on track to achieve the goals we set out in November 2015,” Bellemare continued. “We have clearly demonstrated our ability to reduce costs, improve productivity and grow margins. We have executed on our growth programs and we are taking big strategic steps necessary to unlock the full value of our portfolio.”
East Belfast MP Gavin Robinson welcomed the news.
“It is a welcome piece of news for the company as a whole and obviously for the Belfast plant.
“The timing too is significant and is a vote of confidence in the joint venture between Bombardier and Airbus. I hope this might be the first of many new orders for this ground-breaking aircraft.”