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Delta deal does not guarantee future of Bombardier: expert

By Margaret Canning

Published 02/05/2016

Delta Airlines has signed a deal for up to 125 C Series jets
Delta Airlines has signed a deal for up to 125 C Series jets
Aviation expert Guy Warner

Aviation giant Bombardier has not yet secured the lasting success of its C Series programme despite a major order from Delta Airlines last week, it's been claimed.

And the Canadian company is still waiting to hear whether it will get a bail-out from its federal government with Prime Minister Justin Trudeau tight-lipped on the topic.

The firm's C Series passenger jet was launched last year, two years delayed and $2bn (£1.4m) over budget.

And the company, which employs 5,000 people in Belfast, had also been behind its target for orders - until the confirmation last week of a much-anticipated order from Delta Airlines worth up to $5.6bn (£3.8bn) for 125 of the craft.

The news has given a much-needed boost to the Northern Ireland workforce of the company, which is to shed 1,000 staff over this year as part of a bid by Bombardier to cut costs across all its sites.

The workforce includes hundreds of workers employed on building the wings of the C Series - an inward investment project worth £520m.

But Northern Ireland aviation expert Guy Warner - the author of a History of Aircraft and Aerospace Manufacturing in Northern Ireland - said the company would not be resting on its laurels.

"The Delta order is a start but obviously more orders would need to come in.

"It's great that Delta has shown faith in the product, but one swallow doesn't make a summer.

"It's an extremely expensive business and the Delta deal is great news but to paraphrase Churchill, it's probably not the beginning of the end - but it might be the end of the beginning."

He said Bombardier's charm offensive to other US airlines would continue.

"The C Series is designed to fill a gap in the market between the 70-seater turbo props and the A320 and Boeing 737.

"And that will appeal to the major carriers looking to connect hubs with the smaller airports - of which Delta is a good example. I'd predict that they will be looking hard at the US market."

Closer to home, nabbing a household name could be tougher, he said. "I don't think there's a snowball's chance in hell of getting easyJet or Ryanair as they are so tied up with Airbus and Boeing respectively.

"But you can certainly say they will be leaving no stone unturned."

Mr Warner added: "There's nothing wrong with the C Series - it's just a tough market to crack."

Meanwhile, analysts have said the company will still be looking for a bail-out from the federal government, despite the big-money figures involved in the Delta deal.

It's already secured $1bn from the Quebecois government, in return for a stake in the project - and now wants the same from Canada.

Prime Minister Justin Trudeau praised the C Series as an "exceptional aeroplane" and welcomed news of its Delta deal at the weekend, but did not divulge any investment intentions.

"That's why we're engaged in negotiations and discussions with Bombardier, and have been for quite a while, around the right business case for Canada to invest," Mr Trudeau added.

Konark Gupta, an equity research analyst at Macquarie Group, told CBC in Canada the company still needed the government support.

"They will not get (the Delta deal money) today, tomorrow, or in three years or five years.

"They will get it over many years as they deliver the plane. So that money is scattered over the long term.

"And the federal money, if that comes, will probably come as a bullet. It will come in one or two days," he said.

"Let's say they need $1bn. The Delta order doesn't necessarily satisfy that need right away."

Belfast Telegraph

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