Bombardier signs letter of intent for up to 61 C Series jets but cuts delivery target on engine delays

 
Rebecca Smith
Bombardier has had to revise its delivery target for C Series jet due to engine delays
Bombardier has had to revise its delivery target for C Series jet due to engine delays (Source: Getty)

Bombardier announced today it had signed a letter of intent with a European customer for up to 61 of its C Series jets, but also said it was cutting its delivery target due to troubles with engine delays.

The letter covers 31 firm aircraft orders and options for another 30 planes, and the Canadian firm said it expects to sign a purchase agreement before the end of the year.

Based on the list price, a firm order would be valued at around $2.4bn (£1.8bn), which would increase to around $4.8bn should all 30 options be exercised.

The aircraft has been at the heart of a trade dispute with American rival Boeing, with hefty tariffs imposed on the import of Bombardier's C Series jet to the US, after Boeing accused the firm of dumping planes on the US market at below-market prices after obtaining unfair state subsidies from the UK and Canada.

Bombardier has contested the decision, saying last month: "This hypocrisy is appalling, and it should be deeply troubling to any importer of large, complex, and highly engineered products."

The row prompted job concerns in Northern Ireland, and led to combative responses from both Britain and Canada, with warnings it could disrupt their respective relationships with Boeing, before the announcement last month that Airbus had taken a majority stake in the C Series business.

Alain Bellemare, Bombardier's president and chief executive, said:

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.

It wasn't all good news for the Canadian firm though, which announced its C Series jet news along with third quarter results. Revenues rose three per cent to $3.8bn, but its net loss widened by 24 per cent to $117m from $94m the same time last year.

Bombardier said engine delivery delays from Pratt & Whitney will hinder full-year C Series deliveries too, with eight to 10 expected for the fourth quarter, and 20 to 22 aircraft delivered for the year in total, down from a previous plan for around 30.

Still, the firm expects full-year earnings before interest and tax to come in at $630m or over, at the higher end of its previous guidance.

Bellemare said the company was making "solid progress executing our turnaround plan".

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