Canada certifies Bombardier C Series airliner
Published 1:32 pm Friday, December 18, 2015
Bombardier Inc., battered by delays on its flagship jetliner, got a double dose of good news with regulators’ approval of the C Series model and the winning of a $3.6 billion rail-car contract with Alstom.
Friday’s developments helped buoy the widely traded Class B shares, Canada’s worst-performing industrial stock this year, and added a shot of optimism for the company’s train and aerospace businesses.
Chief Executive Officer Alain Bellemare said he sees good progress in talks with the Canadian government on Bombardier’s request for additional financing, after winning a $1 billion investment from Quebec for the C Series program. He declined to comment on the timing of any federal decision.
Canadian Transport Minister Marc Garneau announced the certification of the C Series at an event outside Montreal, moving the jet closer to Bombardier’s latest target for initial deliveries to start in the second quarter. The plane is running more than two years late and has seen its development costs balloon by $2 billion to $5.4 billion.
The Federal Aviation Administration is working with Transport Canada regarding FAA approval, the U.S. agency said. European and U.S. regulators typically certify aircraft shortly after they are cleared by the country where they were designed and built.
The contract with Alstom is for 3.3 billion euros to supply double-decker cars to the Belgian national railway through 2021. The first 445 wagons are slated for delivery starting in 2018, the trainmakers said. Montreal-based Bombardier’s share of the contract is worth 2.1 billion euros, with the rest going to Alstom, they said.
Bombardier jumped 15 percent to C$1.34 at 2:47 p.m. in Toronto, after gaining as much as 19 percent for the biggest intraday rally since Sept. 10. The advance positioned the company to pare a decline of 72 percent this year through Thursday.
In November, Bombardier decided to sell a 30 percent stake in its train unit rather than hold an initial public offering for the business. The company will use cash from that deal to fund development of the C Series.
Bombardier and Alstom already cooperate on trains for the Paris region’s commuter network and Montreal’s subway system.
