reported revenues of $2.2 billion for the quarter that ended April 30, up from $2 billion the year before, and company executives heralded the 10 firm orders for the program from Sweden’s Braathens Aviation.
Higher than expected business jet sales bolstered the division’s earnings, Bombardier Aerospace President and COO Guy Hachey told analysts on June 1.
“The recovery of regional aircraft is slower; regional airlines did not recover as quickly as commercial airlines.”
The order from Braathens Aviation ended a 15-month order drought for the CSeries. “There is a knee in the curve two-and-a-half to three years before entry into service,” Hachey said. The aircraft is expected to enter into service late in 2012. No airline has come forward as the first operator of the aircraft, however. “Our customers are still reeling from the recession,” Hachey noted.
Braathens Aviation’s firm order of 10 aircraft with options for 10 additional CSeries aircraft is worth as much as $1.37 billion at list prices. Hachey said the company has no intention, yet, of discounting the aircraft. However, he acknowledged that there may be some leeway in pricing. “It’s a brand-new product and it is not established in the marketplace,” he said. We are not doing anything wild or anything crazy in terms of pricing.”
The company expects to build between 120 and 150 CSeries aircraft when production ramps up. Hachey was more optimistic: “It is not beyond the realm of possibility that we will produce between 200 and 250 aircraft per year.” The company is focusing on building up a customer base for the CSeries. “We are looking for a diversity of customers before entry-into-service.”
Including both commercial and business aircraft, Bombardier delivered 61 aircraft in the quarter, up from 56 last year, and had 86 net orders, compared with 61 last year. Backlog for the unit grew 10% to $21.1 billion.
Hachey did not rule out the possibility of building a stretched Q-series turboprop but noted the firm is studying the possibility.
The company’s transportation unit, which builds long-distance and urban rail equipment, posted revenues of $2.5 billion, up from $2.3 billion last year. Overall, Bombardier reported revenues of $4.7 billion, compared with $4.3 billion last year.