Bombardier (TSE:BBD.B), the world's third-biggest aircraft maker, fell in today’s trading, stretching this year’s losses, in the wake of saying it doesn’t expect its CSeries aircraft to begin carrying commercial passengers until early 2016, the latest setback linked to the jetliner program.
Shares dropped 2.4 percent to C$2.44 at 1:42 p.m. in Toronto. The stock has lost 41 percent of its value this year.
The Montreal, Quebec-based aerospace company has gotten cagey in recent months about timelines for the closely watched project, but had warned last month that more delays might be forthcoming.
After an investor meeting in Montreal, the company's new chief executive officer told reporters it is sticking to a timeframe of getting regulatory certification completed by the end of this year. But delivering the planes to customers so they can start using them will happen some time after that.
With certification of the program planned for the end of 2015, you don’t do a delivery before the start of the next year anyway," recently minted chief executive officer Alain Bellemare was quoted by Bloomberg as saying on Friday.
Bellemare’s comments came on the sidelines of a special shareholder meeting that was called to approve a C$1.1 billion equity offering needed to shore up Bombardier’s balance sheet. Shareholders voted 95.22 percent in favour of the resolution.
The company has been saying since January 2014 that the smaller version of the aircraft, the CS100, would enter into service by the second half of 2015. This was already delayed twice from the original planned delivery date of 2013.
Bombardier spokeswoman Isabelle Rondeau emphasized on March 27 that the plane will still be certified by regulators in the latter half of this year.
“We always said that certification of our aircraft would be in the second half of 2015 and that’s still what we’re targeting,” the Financial Post quoted Rondeau as saying.
Bombardier isn’t the first aircraft manufacturer to repeatedly miss its targeted entry-into-service dates. Boeing Co.’s 787 Dreamliner was delayed multiple times, from 2008 to 2011; and Airbus Group’s A380 missed its planned delivery date because it underestimated the amount of wiring it would need in the plane.
The CSeries is seen as key to Bombardier's future as it will be the company's entrant in a growing market for smaller planes that can travel longer distances with better fuel efficiency.
Separately today, Bombardier said it has signed a 10-year deal to provide maintenance and spare parts for 74 four-car trains used on a rail service between London and points to the east.
The contract from National Express is valued at about $213 million, with a five-year extension option.
A unit of National Express was awarded the Essex Thameside franchise last year by the U.K. Department of Transport.
Bombardier said it will introduce its Automatic Vehicle Inspection System, which is already in use at its Central Rivers service depot in the United Kingdom and the Gautrain Rail service depot in South Africa.