BUSINESS

Bombardier CEO confirms CSeries deliveries delayed until early 2016

03/27/2015 03:10 EDT | Updated 05/27/2015 05:59 EDT
MONTREAL - Bombardier's new CEO says the entry into service of its new CSeries commercial aircraft will be delayed until early 2016.

Alain Bellemare said Friday the company still hopes to receive certification by the end of this year, but confirmed the first planes will be delivered to customers sometime in the new year.

The company said during the Feb. 27 first flight of the CS300 that the first aircraft deliveries could be pushed a few weeks into next year if customers needed more time for training.

Bellemare insisted the timing has not changed and isn't significant for an aircraft that will be in service for 30 years.

"If we talk about weeks or months, the most important factor is if the airplane performs and obtains the cost objectives and operating costs for the operators," he told reporters after the company won shareholder support for a plan to raise $1.1 billion by issuing shares.

Analyst Walter Spracklin of RBC Capital Markets said the early 2016 delivery time frame is not a surprise.

"Furthermore, we do not believe this potential shift in the delivery schedule represents any material changes to the anticipated capex of the program," he wrote in a report.

Meanwhile, Bellemare said the company has enough financial flexibility to complete the CSeries commercial jet and other development projects without selling assets at rock-bottom prices.

Bombardier raised $1.1 billion from issuing the shares and US$2.25 billion in new debt.

Bellemare, a former United Technologies executive who began to pilot Bombardier in February, said the company is examining all its "strategic options." That includes joint ventures as part of consolidation in the railway sector and potential asset sales.

He told reporters that there are no "sacred cows" that must be preserved as it make decisions that will affect the company's long-term future.

Industry analysts have suggested Bombardier could sell its Learjet business aircraft operations for as mush as US$750 million. Bombardier stopped work earlier this year on its Learjet 85 as it looked to preserve cash.