C Series Update - Airbus potentially investing

[xchox]

http://mobile.reuters.com/article/idUSK ... sinessNews

[SeptRepair]

Did you read the article you linked to?

[Nark]

It's pretty obvious he didn't.

Bombardier should stick to making trains and snowmobiles. The CSsries is a wreck.

[leftoftrack]

It's pretty obvious he didn't.

Bombardier should stick to making trains and snowmobiles. The CSsries is a wreck.

by a wreck you mean 20% more efficiant than CEO's and 10%more efficant than NEO's

[teacher]

The CSeries has exceeded or met all it's performance numbers. It is more sophisticated than all the Boeing, Airbus or Embraer offerings. Like the 787 it will take time but is a real winner. It's sold out until 2018.

[xchox]

Did you read the article you linked to?

I did. I fucked up the thread title.

[AirMail]

The C Series is over 85% complete, and yet they want to give away over 50% control over it? Doesn't make much business sense to me, but seeing BBD stock price it seems this is the norm for such decisions. How much more will it cost to complete the remaining 15%? Don't they still have LearJet they are trying to off load? Perhaps they really don't think they can get 300 orders to make it viable. And how will the Cseries be marketed with along with Airbus planes?

[Nark]

A wreck, in which I mean it's bankrupting the company.

MONTREAL/WASHINGTON/PARIS (Reuters) - Airbus (AIR.PA) on Tuesday called off talks with Bombardier (BBDb.TO) over propping up the troubled CSeries jet, leaving the Canadian plane maker facing dwindling options to keep its dream of competing in the aerospace big league alive.

What's the stock price/trend?

Listen gents, I love a good Canadian aviation success story, just like the rest of you, but the CSeries isn't it.

Do you need me to link to the demise of Fokker?

The C300 at high density configuration has 145 seats. The A320neo in high density has 178 seats. Ignoring the fact that Pratt & Wittney is the engine manufacturer not Bombardier, the 20% you boast about is comparing the CURRENT IAE or CFM engines. Comparing the PW1500 (CSeries) to the PW1100 (Airbus) the 1500 has 5% reduction at a cost of 33 available seats and 2200nm range.

Let's keep "efficiency" in perspective.

[leftoftrack]

A wreck, in which I mean it's bankrupting the company.

MONTREAL/WASHINGTON/PARIS (Reuters) - Airbus (AIR.PA) on Tuesday called off talks with Bombardier (BBDb.TO) over propping up the troubled CSeries jet, leaving the Canadian plane maker facing dwindling options to keep its dream of competing in the aerospace big league alive.

What's the stock price/trend?

Listen gents, I love a good Canadian aviation success story, just like the rest of you, but the CSeries isn't it.

Do you need me to link to the demise of Fokker?

The C300 at high density configuration has 145 seats. The A320neo in high density has 178 seats. Ignoring the fact that Pratt & Wittney is the engine manufacturer not Bombardier, the 20% you boast about is comparing the CURRENT IAE or CFM engines. Comparing the PW1500 (CSeries) to the PW1100 (Airbus) the 1500 has 5% reduction at a cost of 33 available seats and 2200nm range.

Let's keep "efficiency" in perspective.

stock price is rarely tied to prformance

I doubt the c series is going away

Fokker didn't build other stuff at the same time no wildly successful rail unit/corprate jets

The CS300 has a high density seating configuration of 160 not 145

https://www.flightglobal.com/news/artic ... lt-383179/

the A320 high density offers 189 seats

http://worldairlinenews.com/2014/07/04/ ... -and-a321/

the cs300 doesn't compete with the 320 it competes with the a319 at 140-160 seats

http://www.airbus.com/aircraftfamilies/ ... mily/a319/

range is 3300 NM for the cs300 vs 3900 NM for the a319 not sure where you got 2200NM less I suspect you'll see a bump in both of those ranges

also Bombardier has trademarked the name CS500 and CS900.

from a company that stretched a challenger into a 100 seat RJ you think they might be able to find room for 8 more rows of seats in a stretch?

[Gino Under]

... Let me put my rose coloured glasses on for a moment ...

Airbus has clearly stated they are not interested and that's that.
I doubt Boeing is interested but who knows if BBD have even asked?
Embraer? Who cares?
China? Seriously!!!
IMHO, none of these players are in a financial position to seriously consider it anyway. You can go through the research on that comment for yourself. I already have. I think P&W would be a better prom date than either A or B.

But let's be honest, the only reason there will even be a Neo or Max is because Bombardier clean sheet designed a C series aeroplane in the first place. An expensive proposition no matter how you slice it.
It surprises me not that costs have escalated since the launch of the C series with those hard to anticipate or predict unforeseen delays and all. Ask the Dreamliner team. Neither does it surprise me that a new CEO looking at finances (as of last winter) decided to poke around for some cash investment from interested 3rd parties. You'd expect him to do that. You have to at least ask around while you're standing there burning cash like a pile of leaves knowing full well the size of the pile you're burning. Wouldn't you?
This company may well be on its way to joining Nortel and A.V. Roe but I'd remember this, if Harper wins this month, the Feds along with Quebec (and others) could well step in to put money where their mouths were last time this discussion hit a crescendo and they promised financial aid. Hell, Quebec even said outright they wouldn't let BBD fail.
I for one have no doubt about the aeroplane and its future success. The company, not so much.
Anyway you see this playing out, they are burning through cash and they need to raise additional cash to keep funding this to certification.
It wouldn't hurt BBD to be a lot more confident in their products.
It also wouldn't hurt their marketing department to do a better job of doing their job.

Gino

[CID]

The C Series is a great airplane and investors seem to agree. Every time the aircraft meets a certification milestone, the stock goes up. People are jittery because the A380 and 787 fiascoes are still fresh in their memories. The C Series has had it's "bumps" in the road but compared to A380 and 787 they are minor.

Airbus enjoys direct subsidies from government and Boeing gets continuously flooded with money from Defense contracts. I would like to see our government step up a little to help C Series get certified and begin deliveries. I really think orders will take off once that happens.

The current political climate in Canada is contrary to these sorts of subsidies so let's hope for a change after October 19.

[Rookie50]

Company is done. BK within a year, 2 at the most. Done, cooked, history.

The recession that's coming --- you flying tourists around to fishing camps might want to think about that -- will finish off BBD.

Don't shoot the messenger.

[leftoftrack]

http://business.financialpost.com/news/ ... -available

I some what doubt they are going bankrupt

[Gino Under]

Bombardier just might disappear one day. I don't know. If I could see the future I'd go out right now and buy the winning 6-49 for tonight's $64 million jackpot and everyone could go get stuffed.
If only?

What comes through loud and clear in most, if not all the negative posts in this thread, is:
1. The poster doesn't like Bombardier
2. The poster doesn't want to see them succeed
3. The poster doesn't think CSeries can compete with Boeing and Airbus because it's a joke
4. The poster believes no competitor is interested in investing in the company
5. The poster repeats already reported negative (while intentionally ignoring the positive) information read somewhere else.

Airbus and Boeing have troubles of their own as does Embraer, yet very few here seem to bring it up. The B747-800 is a bust compared to the A380 which isn't getting much traction either. Costing both A&B mega bucks.
The A350 and B787 aren't that much further behind in the money drain category either.
The B767 military tanker has cost Boeing billions over budget as has the A400 for Airbus (EADS) and Brazil's economy is all but in the toilet.
The CRJ 1000 is an example of one derivative too many for BBD as is the A319neo and the B737-900 MAX.
Derivative aircraft aren't always a good idea nor are they the most cost effective solution. The MAX and neo come to market as nothing more than a quick, least expensive answer to a real threat. Both Boeing and Airbus will have to come to terms with the reality of a clean sheet design for both the MAX and the neo. It would seem Bombardier already learned that lesson with their CRJ product.

The clean sheet design CSeries on the other hand is the future for BBD Aerospace. The CS100 and 300 are likely stepping stones to larger, more competitive aircraft for BBD across additional seat sectors, if the company survives. I would say a larger version of the CSeries 300 is precisely the future a company like BBD should pursue. This notion alone could well be the biggest reason fellow OEMs aren't interested in investing in this aircraft company or the program. Not to mention, both A&B aren't exactly strong financially.

BBD claim to have the resources to meet the certification of both the CS100 and CS300. They already have production aircraft moving down their assembly line and their launch customer sounds anything but discouraged by the negative press or with the aircraft. It doesn't look to me like any failure is imminent.

As Canadian companies go, I'm rooting for them to succeed.

Gino

[Rookie50]

Gino,

I'm in the investment business, which means I'm in the risk business. It's not a matter of not liking the product, the company or any number of biases. It's not a matter of Boeing or anyone else, either.

It's about financial strength, both of BBD , the industry and the underlying economy. And that doesn't favour weaker players in any industry.

They are done, cooked unless Quebec wants to shovel money in forever, at least the aviation business, as a going concern. Obit just hasn't been written. Only a matter of time now.

[Gino Under]

Rookie50

I appreciate the input.

I think the one message, loud and clear in all of this, is the financial reality this company faces. I get that. So, you're undoubtedly right in your analysis. Time will tell.
That hoped for huge CSeries order might delay the inevitable, it might even avoid the inevitable. I don't know for sure. They haven't made that sale yet.
If the financial reality wasn't understood before, for me, it certainly was shortly after Bellmare took over. I do agree, their doomsday clock is ticking. But, there are those financial and industry analysts who seem to think BBD have options or choices regarding their survival. I'm neither a financial analyst nor industry analyst but merely an armchair critic who prefers to think more positive than negative.

Approaching a rival can't be good but if a rival invests it can only be good. So, I see their discussions with Airbus or whomever comes next as a good thing for their survival. Is it too little to late? Possibly.

I've been a pilot for almost 40 years so I've been a risk manager on some level for most of those years. When you see the ground rising up at you, you have a choice. When you hear a terrain warning go off, you react. How you react will determine the outcome. In simplistic terms, Bellmare took over and saw things headed for the ground. Shortly afterward the warnings must have went off all round. Now, let's see how he reacts.

Cheers,

Gino

[Rookie50]

Gino,

From my chair - and am I'm far from an industry expert - the C series was a big mistake. Possibly fatal.

It's a low margin business with entrenched competition, and it's attempting to be launched during a difficult demand period. Even with orders, If the margins aren't there it's a cash drain.

Should have stuck to business jets, which are a higher margin product.

[Nark]

Gino,
I'm quite far from an industry expert by any stretch. However you cannot compare Airbus' and Boeings excursions into the A350/380 and the 787 and -8 to that of BBD's. Airbus has several hundred, if not into the thousand of aircraft orders. So much so that they are opening a plant in Alabama. Boeing has 737 order out the nose. This translates to cash flow. While BBD does have CRJ's on order they don't have the cash on hand for the R&D to keep the CSeries out of rough water (which we are seeing).

You can't compare, directly at least, Boeings gamble with the 747-100 and the CSeries gamble.

[Gino Under]

Perhaps I need to be clearer with my opinion on Bombardier. And I'm not attempting to solicit agreement or disagreement with my opinion because we fundamentally disagree.

That said, unlike an overwhelming majority of opinions regarding Bombardier, I see Airbus and Boeing as not being the exclusive competition for Bombardier. For me, this is a significant difference many seem to overlook.

Embraer, Mitsubishi, and others present more realistic competition for them than either Airbus or Boeing. So, to me, EMB, MRJ, COMAC, Sukoi (aircraft primarily aimed at the regionals unlike the CSeries) all present weak competition for BBD because BBD have already reduced production of the CRJ and moved toward supporting existing RJs and away from sales. Where I see market overlap with A&B there is very little to compete with because A&B don't offer much in terms of competitive aircraft for the CSeries in the 110-130 seat segment. Yes. A&B can throw their aircraft into the mix but they would unlikely hold or improve market share over time. It's that market share they don't want to lose and why both jumped in feet first in response to the CSeries with modified existing types. That's undeniable.

I tried to point out that everyone is focused on money as if to imply A&B aren't pissing away billions as well. Both A&B are bleeding billions but seem to do a better job of obscuring that fact for the press. I'm not convinced BBD are bleeding while everyone else isn't. That's just not the case. We all know BBD are burning through millions each day, just like the other guys. The difference is the others have lots of orders on the books for a potentially brighter future. Agreed. The same applies to Bombardier if (or when) they start selling more of their CSeries. We also know both A&B have programs that need to be cancelled (like the A340 and the B757 were, the A350-900, B747-8 and the B737-900 need to be) and both will soon need an all new clean sheet aircraft to be built. That's a future neither one seems eager to take on right now due to the reality of their financial situation and present market conditions.

"the C series was a big mistake. Possibly fatal."
A mistake? No. They need a commercial aircraft that isn't a regional jet. They need to look to the future and visualize a more competitive product line if it wishes to survive.
A potentially fatal decision? Possibly. It's high risk. But certainly the way forward.
"It's a low margin business with entrenched competition, and it's attempting to be launched during a difficult demand period."
You're absolutely right. Because A&B are selling their souls to compete with each other by deep discounting their fire sale of A320s and B737NGs, everyone else is suffering the reality. Not good for anyone, not just BBD.
"Should have stuck to business jets, which are a higher margin product."
It looks like BBD are consolidating their business aircraft. Lear could soon be sold off. The 415 is done. Both moves stem the flow of cash and would likely bring in some much needed cash. The fly-by-wire 7000 and 8000 are their future. Their delay is a good thing. The 300/350 and 605/650 are holding their own. Gulfstream and Bombardier will always flip between No. 1 or No. 2, just like A&B.

"you cannot compare Airbus' and Boeings excursions into the A350/380 and the 787 and -8 to that of BBD's."
I think you can. Each of your examples are clean sheet designs. BBD has one clean sheet design. The CSeries. I see two airlines when I look at your examples. Emirates and Qatar. Exclusive buyers launched those 4 aircraft and only one of those extremely expensive to bring to market aeroplanes stands a chance of being successful. One.

"Airbus has several hundred, if not into the thousand of aircraft orders. So much so that they are opening a plant in Alabama. Boeing has 737 order out the nose. This translates to cash flow."
Agreed. But, before any of those aircraft are delivered the cash flow is one direction. Out.
They have to build those facilities. (Yes. I know their plant in AL is already in operation) They have to buy the parts and material to build those aircraft. They have overhead to pay they have salaries and benefits to pay plus other costs associated to building those aircraft. The saving grace is their size and their order book.

"While BBD does have CRJ's on order they don't have the cash on hand for the R&D to keep the CSeries out of rough water (which we are seeing)."
If BBD are to be believed, they can run their company till this time next year. Much can happen in a month in this business, never mind a year. We'll see.

"You can't compare, directly at least, Boeings gamble with the 747-100 and the CSeries gamble."
I was referring to the -800 not the 100, but to take your point, the 800 is a derivative not a clean sheet design. So, you're right. I was suggesting numbers sold for comparison, which is perhaps a non-starter.

Hundreds of orders would be great for BBD. No doubt. Is that going to happen? Who knows? I think it will. It better be soon. But we all seem to agree on this, if it doesn't happen soon there may not be a Bombardier within months.

Gino

[North Shore]

One small point, Gino, if I may... the 415 is not 'done'. The line has been mothballed as there are no current orders. (Assuming BBD survives) Once sufficient orders have been accumulated once more, the line will re-open for a year or two, and theyll churn out more airframes. Id imagine that the original launch customers are probably beginning to think about fleet replacement, as are the 215T operators.
However, rumour on the street is that Bombardier Amphibious Aircraft is for sale...

[brownbear]

As you can see with the bail outs, they will not fail. Quebec and Feds will keep them going. I highly doubt you will ever see them never exist.

I don't like the bail outs. But somehow it's more desirable to me than if foreign ownership occurred. Like being bought by a Chinese company.

It will be a successful program, in the same experience as the Dash line I am sure.

[watermeth]

If I may bring some precisions Brownbear.
As of the latest info available it is not a bail out.
The province is lending 1b$ against a 49.5% stake in a company composed of all liabilities and equities in direct relation with the Cseries program. Therefore the province is entitled to receive a %tage of future earnings, if any, to reimbourse it self.

Long live the Cseries.

[Gino Under]

Wasn't the Ontario automobile industry bailed out by Mr. Harper back in 2009, or thereabouts?

Gino

[golden hawk]

http://www.ctvnews.ca/business/quebec-g ... -1.2632871

Quebec gives US$1B lifeline to Bombardier

Ross Marowits, The Canadian Press
Published Thursday, October 29, 2015 4:07AM EDT
Last Updated Thursday, October 29, 2015 5:57PM EDT

MONTREAL -- Bombardier says a US$1-billion lifeline from the Quebec government will help complete development of the CSeries and restore customer faith in the delayed and costly commercial jet program.
"It's all about giving confidence that the CSeries will be there and that Bombardier will be there to support these programs that are going to be in service for many, many years," CEO Alain Bellemare said Thursday as the company posted weak third-quarter results.
Montreal-based Bombardier lost US$4.9-billion, tied mostly to large writedowns in the CSeries and the abandoned Learjet 85 business jet programs, along with operating results that were substantially below already low expectations.

Bombardier (TSX:BBD.B) says it will match Quebec's investment by also spending US$1 billion to complete the CSeries, which is about two years behind schedule.
Up to 20 of the aircraft will be built next year as Bombardier ramps up to full production in three to four years and aims to break even by 2021, the company said.
With Quebec's contribution, Bombardier will have US$5 billion in cash this year, plus proceeds from the sale of a minority stake in its railway division that will provide a cushion to bring the CSeries to production and develop its Global 7000/8000 business jet.
Bellemare said later in an interview that Quebec's help in shoring up its finances will give the company room to manoeuvre and answer skeptics who wonder if it can sell the CSeries at prices that better compete against large rivals like Airbus and Boeing.
"I understand, and the new team understands, that to relaunch or to regain traction in the marketplace we'll need to be aggressive," he said.
Bombardier plans to transfer the CSeries program to a new partnership to be chaired by former Quebec premier Daniel Johnson and owned 50.5 per cent by the company and 49.5 per cent by the province.
The company has committed to maintain CSeries operations in Quebec for 20 years. The deal includes warrants that allow Quebec to purchase up to 200 million Class B shares representing about 8.9 per cent of outstanding shares.
Premier Philippe Couillard described the financial contribution as an investment, not a subsidy, in a company that is an important driver of the provincial economy. Bombardier directly employs 18,000 people and supports 40,000 in Quebec's aerospace industry.
"I want to remind all Canadians that aerospace is as important to Quebec as the automotive sector is for Ontario. It is quite normal that the state gets involved," he said in Quebec City.
The CSeries, which competes with smaller planes from Airbus and Boeing, is about 97 per cent of the way through final testing -- one of the last steps before the aircraft can be put into service by mid-2016.
Bellemare, who was brought in earlier this year to overhaul the struggling company, conceded that Bombardier has been overwhelmed by too many development programs.
He added that the company has no plans to alter its dual-share structure that gives the founding family control, adding it wasn't discussed during negotiations with Quebec.
While Bombardier approached many governments and potential private sector partners, Bellemare said it didn't use talks with foreign groups to leverage a deal with Quebec.
"Our strategy was not to start pitting one against the other, it was to look at all opportunities and find the one that does make the most business sense for us and that's where we landed with Quebec," he said.
Analyst Chris Murray of AltaCorp Capital said Quebec's contribution adds certainty that Bombardier can finish the program and support it for decades to come.
"I don't think it's a Hail Mary so much as it's probably the best solution that's out there," he said, referring to the company's discussions with Airbus, the Chinese and other potential partners.
Karl Moore, professor at McGill's Desautels Faculty of Management, said the deal doesn't solve all of Bombardier's cash flow problems, but does give it "breathing room."
The cash infusion also adds security for Bombardier workers, said Dave Chartrand of the International Association of Machinists and Aerospace Workers.
"Knowing that all the employees inside have been worried for the last couple of years because of everything that's going on ... this comes as a good surprise," he said.
Bombardier's US$4.9-billion net loss -- which amounted to $2.20 per share -- includes a $3.2-billion writedown related to the CSeries program and a US$1.2- billion charge for the Learjet 85.
Adjusting for the CSeries and Learjet 85 losses and other items, Bombardier would have had a US$2 million profit -- essentially break-even, down from US$222 million or 12 cents per share a year earlier.
Revenue for the three-month period ended Sept. 30 fell to US$4.1 billion, down $800 million from a year earlier.
Bombardier's shares closed down 17.3 per cent at $1.33 in Thursday trading, reversing Wednesday's gains on the Toronto Stock Exchange.

[watermeth]

Wasn't the Ontario automobile industry bailed out by Mr. Harper back in 2009, or thereabouts?

Gino

You're right, and it will hopefully bear its fruits as it did with the auto industry.