Bombardier Eyes CSeries Market Entry As It Seeks Cash

Bombardier continues to talk to Canadian officials about another possible $1 billion investment as it transitions from development to entry-into-service of its new CSeries program. The program received a boost from the recent $1 billion commitment from the Government of Quebec, which strengthened the company’s near-term liquidity position. The company since has asked government officials in Ottawa to consider its request for another investment with some urgency, the Canadian newspaper The Globe and Mail reported.

Bombardier Commercial Aircraft president Fred Cromer acknowledged talks that Bombardier would need another $1 billion as it ramps up on the CSeries, but said the company is taking steps to minimize risk.

At a recent Investors Day, Cromer outlined plans to work with suppliers, focus on lowering production costs and ensuring a smooth entry-into-service for the CSeries. With flight test complete, he said the program is at the “door step” of certification and the company has been working toward next year’s service entry with launch customer Swiss International Airlines.

“Entry into service is crucial. We need to be flawless,” Cromer said, adding, “We have very robust plans in place to ensure our best sales people will be the operators of this plane.”

Recent function and reliability proving runs have given confidence in those plans, he said, noting that during the 150 hours conducted so far to mimic the airline environment, the aircraft achieved a 100 percent dispatch rate. “The first block proved to us reliability out of the box is putting us on a path to be successful,” he said.

The company is planning a gradual ramp up that would involve between 250 to 300 deliveries over the next five years. For 2016, deliveries are estimated at 15 to 20, nearly doubling to 30 to 35 in 2017 and eventually reaching 90 to 120 by 2020.

Cromer called the ramp up “very manageable,” noting the program has firm orders for 242 aircraft. Including letters of interest and options, that number grows to more than 600, he added.

While Cromer stressed the company is not satisfied with the orders, he also said that it is conducting more strategic negotiations for large fleet orders since “we don’t have a tremendous number of positions [available] in the near term.”