Bombardier says C Series shift to Airbus allows it to focus on regional planes
August 2, 2018 by Ross Marowits The Canadian Press
August 2, 2018 – With its focus no longer diverted by the aircraft formerly known as the C Series, Bombardier Inc. says it is working to improve the profitability of its regional jets and turboprops by boosting sales and cutting costs.
The Montreal-based transportation giant’s regional aircraft order backlog rose to 116 planes, enough for three years of production that sets it up for the potential to increase production rates. Its commercial aircraft segment won orders for a total of 16 Q400 aircraft and 35 CRJ Series equipped with its new cabin design.
“Adding a little bit of volume here also is very beneficial to those programs as you add units especially at the current rates–that does improve the cost structure,” said chief financial officer John Di Bert during a conference call about Bombardier’s second-quarter results.
Bombardier’s shares increased nearly five per cent at $4.99 in Thursday trading after the company posted strong results and signalled that its turnaround plan remains on track.
“Our solid performance positions us to achieve our free cash flow break even target for this year and more importantly to sustain cash generation well into the future,” Di Bert added.
Bombardier, which reports in U.S. dollars, said overall revenues increased three per cent to $4.26 billion in the second quarter.
Most of the improvement was due to an 11 per cent increase in revenue at Bombardier Transportation, which accounted for $2.26 billion of the total. Revenue fell at Bombardier’s commercial aircraft and business aircraft divisions.
“With our heavy investment cycle largely behind us, our focus is now on ramping-up production and improving operational efficiency to accelerate growth,” CEO Alain Bellemare told analysts.
Bombardier concluded a number of key strategic actions in the quarter, including closing a partnership deal with European giant Airbus.
Under the partnership, the European aircraft manufacturer acquired a majority 50.01 per cent stake in the C Series commercial jet program effective July 1. Airbus has since renamed the two models of C Series passenger jets to the A220-100 and A220-300.