Bombardier signs letter of intent for up to 61 C Series planes

Aircraft maker’s losses rise 24% in third quarter despite small increase in sales

Making a  C Series wing   in a  Bombardier factory in Belfast. Photograph: Clodagh Kilcoyne/Reuters

Making a C Series wing in a Bombardier factory in Belfast. Photograph: Clodagh Kilcoyne/Reuters

 

Bombardier has signed a letter of intent with a European customer for up to 61 of its C Series regional jets, the aircraft that has been at the centre of a transatlantic trade dispute with US rival Boeing.

The letter covers 31 firm aircraft orders and options for another 30 aircraft, the Canadian group said. Based on the jet-maker’s list prices, the firm order would be worth around $2.4 billion (€2.06bn), rising to $4.8 billion (€4.12bn) if all 30 options were exercised. It expects to sign a purchase agreement before the end of the year.

Over the past two months US trade officials announced anti-dumping duties of 300 per cent on the C Series after ruling that Bombardier received unfair subsidies from Canada and UK for the plane.

The prohibitive level of the subsidies threatened thousands of jobs in Northern Ireland and Canada, prompted a diplomatic spat and sent Bombardier into the arms of Europe’s Airbus, which took a majority stake in the C Series business.

The wings for the C Series are made in the former Shorts plant in Belfast, and are the primary focus for around 1,000 of the 4,000-strong Irish workforce.

“This significant new order confirms the increasing confidence customers have in the C Series,” Bombardier president and chief executive Alain Bellemare said. “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.”

Revenues

Bombardier on Thursday reported revenues of $3.8 billion (€3.26bn)for its third quarter, up 3 per cent from the same time last year. But its net loss increased 24 per cent, to $117 million (€100.3m) from $94 million (€80.6m) a year earlier.

Adjusted earnings per share edged down from zero in the 2016 third quarter to minus $0.01 in its latest period.

The group said it expected consolidated full-year earnings before interest, tax (Ebit) and special items to be at least $630 million (€540.4m), at the high end of previous guidance, as the company reported “solid progress” on its two-year-old turnaround plan.

In the latest quarter, the Ebit before specials figure was $165 million (€141.5m), near twice the equivalent number last year. – Copyright The Financial Times Limited 2017