November 28, 2016 / 11:42 PM / 2 years ago

Bombardier sees 2017 catch-up in jet deliveries, lifting export lag

OTTAWA/MONTREAL (Reuters) - Bombardier hopes to make up for lost ground on its plane exports next year, an executive said on Monday, after fewer-than-expected CSeries shipments contributed to a weaker outlook for Canadian aerospace exports in 2016.

A Bombardier logo is pictured on the company booth during the European Business Aviation Convention & Exhibition (EBACE) at Cointrin airport in Geneva, Switzerland, May 24, 2016. REUTERS/Denis Balibouse

Bombardier said in September that it would ship seven CSeries planes in 2016 rather than the 15 it had expected due to engine delivery delays by supplier Pratt & Whitney, a unit of United Technologies Corp.

That was part of the reason Export Development Canada (EDC) in October cut this year’s forecast for export growth in the aerospace sector in half.

The aerospace sector is now expected to see 6 percent growth, sharply lower than the 13 percent growth EDC had forecast in the spring, due to a combination of a weaker global economic outlook and the change in Bombardier’s plans, said Ross Prusakowski, senior economist at EDC.

On Monday, Bombardier Commercial Aircraft President Fred Cromer said he expects to meet CSeries delivery projections for 2017 and possibly play catch-up on 2016.

“We may catch up a little bit,” he told reporters at its Mirabel factory. “But it’s going to take mostly through 2017 for us to kind of get right back on track.”

Bombardier plans to deliver 30 CSeries planes next year, which should help give overall exports a much-needed lift if delivered, economists said.

The aerospace sector saw export growth of 14 percent in 2015 as most Canadian aircraft and parts manufacturers experienced solid growth, said EDC’s Prusakowski.

Bombardier is not the only factor hampering the country’s exports, which have been hit by the drop in oil prices and a lackluster global growth and trade backdrop. Years of loss of market share have also left manufacturers without the ability to ramp up production quickly.

Still, exports of aircraft and other transportation equipment and parts were down 8.4 percent in the first nine months of the year compared with the same period in 2015, according to Statistics Canada. The sector accounted for 4.6 percent of total exports in September.

Exports of aircraft alone were down 24.1 percent in the same timeframe. Statistics Canada does not publish the specific contributions of individual companies.

“The disappointment on the aerospace front that has been reflected in the export data thus far is helping to explain the weakness in overall exports this year,” said David Madani, economist at Capital EconomicsMadani.

The Bank of Canada has been betting on the export sector to help drive economic growth and recently downgraded its forecasts.

The outlook for Canada’s exports next year has also become more murky since the Nov. 8 U.S. election of Donald Trump, who has promised to renegotiate the North American Free Trade Agreement.

Additional reporting by Allison Lampert in Montreal; Editing by Jonathan Oatis

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