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Hopes rise for C Series jets as Bombardier to reveal if it has secured a deal with Delta

By Margaret Canning

Published 28/04/2016

Delta Airlines planes
Delta Airlines planes

Canadian aerospace giant Bombardier is expected to reveal today if the company has secured a game-changing Delta Airlines deal for its C Series jets.

Montreal-based Bombardier, which employs around 5,000 people in Belfast, will also reveal its financial results for the first three months of 2016 this morning.

The results had been due to be released tomorrow - but the company confirmed it had brought forward the financial statement by one day.

Analysts have suggested that Bombardier may announce an order for its C Series jets - the wings of which are made in Belfast - as part of the results statement. The production of wings for the C Series is Northern Ireland's biggest-ever inward investment programme, worth £520m.

A shareholders' meeting will also take place in Montreal tomorrow.

A spokeswoman for the company in Belfast said: "Bombardier will announce material agreements if or when any are finalised."

The company has so far received a disappointing level of orders for the narrow-bodied passenger jet, developed in a daring bid to take on market giants Airbus and Boeing.

It's had just 243 orders and hasn't had a firm order since September 2014.

The C Series was launched earlier this year, around $2bn over budget and delayed by three years - and a deal with a major airline like Delta is crucial to its viability.

And it would be a much-needed boost to morale for Bombardier's Belfast workforce. In February, the company announced 1,000 job losses this year and next.

One US-based analyst told the Belfast Telegraph that the situation for Bombardier was "tense".

"Airbus is also claiming victory and I think if Bombardier loses Delta, CSeries is done for, more's the pity."

But another analyst was more optimistic when speaking to Reuters, citing increases in its stock value during April.

But Morningstar analyst Chris Higgins also suggested today was a 'make or break' day.

Mr Higgins said: "With the move in Bombardier's shares and the further jump in the stock, if they do not have a Delta order in their back pocket I would not want to be their management team come Thursday.

"It looks like everyone's expecting it now and them moving the earnings date is also suggestive."

Reuters also said it understood that one of Bombardier's C Series test planes would be at its Atlanta headquarters today.

According to the Montreal Gazette, Delta is set to host media events today, but it would not say if the subject of aircraft orders would be discussed.

Bombardier's full-year results in February coincided with a letter of intent from Air Canada to order up to 75 of the C Series, though that order has not been firmed up.

Delta is currently shopping around for 125 narrow-bodied jets - and securing an order of that size would be a major lift to Bombardier and its Belfast workforce. Sources earlier this month suggested the deal would consist of a firm order on 75 planes and options to buy another 50.

A firm order for 125 planes would be worth about £4.45bn at list prices, although industry analysts believe any deal would be at a discount from the list price of 50% or more.

And Bombardier is still waiting for the Canadian federal government to confirm if it will follow Quebec's administration in giving the company a financial bail-out.

The regional government in Quebec, where Bombardier is based, has already ploughed $1bn into the C Series programme in return for a 49.5% equity share.

Belfast Telegraph

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