Problems with the ’ supply chain have forced to push the first flight of its baseline CS100 to as late as June 2013, up to six months later than initially planned.
The Canadian airframer provided few details on the reason for the delay, offering only broad statements on the need to “harmonize” the flow of parts to the assembly base in Montreal; it also said it previously discussed issues about delays with “major systems.” Bombardier Inc. Chairman and CEO Pierre Beaudoin, during the company’s Nov. 7 third-quarter results conference call, however, conceded that while part of the problem lay with some suppliers failing to deliver on schedule, “some are late because we gave the drawings late.”
Beaudoin also was keen to point out that the company had built in a four- or five-month cushion for this phase of the CS100’s development, although entry-into-service also is pushed out to as late as June 2014. The CS300 program, however, remains on schedule with entry-into-service in 2014, Beaudoin continued, noting that the delay also has not affected the cost of the CSeries’ development.
The problem does not lie with the Pratt & Whitney engines designed specifically for the CSeries, added Beaudoin. The engine maker is on schedule to certify theby the end of this year, according to Bombardier.
While Bombardier’s leadership minimized the adverse effect of the program delay, it had to acknowledge that its sales forecast for 2012 was overly optimistic, and that an expected $2 billion in cash flow for the year would now dip to about $1.2 billion, due in part to a shorter delivery period for some aircraft types that did not allow the company to book advance payments in the normal two-year window.
But while the cash flow slowed, Bombardier Aerospace still has some $2 billion in development costs to cover for the year, so the company has now revised its full-year guidance to show that the cash flow is $800 million short of target.
Despite this, Bombardier management still says, “We feel good where we stand,” and is confident that the CSeries delay will not affect pending sales and that the cash flow issue is temporary. The company also points to a solid book-to-bill ratio of 3.2:1 for its commercial aircraft division as an indicator that operations are still healthy.
The company also maintains it will meet its full-year delivery schedule of 180 business jets and 55 commercial aircraft.
Bombardier Aerospace’s third-quarter financial performance was slightly behind the fiscal third quarter of 2011, with pre-tax profits off just $4 million, purely on a better mix of higher-yield business jet deliveries. The 12 commercial deliveries for the three-month period, however, were half of the 2011 third-quarter rate.
(Editor’s note: This article contains revised details on the CS100 entry-in-service)