ZURICH (Reuters) - Talks between struggling planemaker Bombardier and the Canadian government about financial support are “going well,” a company executive said on Wednesday as its delayed CSeries jet took another step toward delivery in the second quarter.
Bombardier (BBDb.TO) wants $1 billion in federal aid to help finance the 110- to 130-seat jetliner, which has been hit by cash shortages and delays, after receiving the same amount from Quebec last October.
“They (the talks) are progressing well. They (the government) and we will make an announcement if we get to an agreement,” Rob Dewar, vice president and general manager of the company’s flagship CSeries program, told Reuters.
He declined to comment on when a deal might be reached, but a source with knowledge of the situation said last week an announcement could come within weeks.
The first airline due to take delivery, Swiss International Air Lines, said it had sought reassurances from Bombardier, but believed the CSeries would perform well once it joins its fleet later this year.
“Quite frankly, we asked the question where do they stand, how they see the development,” the airline’s chief technical officer, Peter Wojahn said.
“Of course, as we worked as partners together we got some more detailed information ... but so far they’ve convinced us that everything is on the right track and that they are well positioned, also on the financial side, to succeed with the program,” he said.
“On the other end, as you can imagine, we have some guarantees in our contract.”
Wojahn said after the completion of European route trials that he expected Bombardier to meet its latest target of delivering the jet by the end of June and predicted it would go into service in the third quarter, possibly in July. “We see the progress they are making. I‘m confident we will make it by June,” he told a news conference.
Swiss is part of the Lufthansa Group (LHAG.DE) which also recently took delivery of the first A320neo from Airbus (AIR.PA), a revamped model that uses a similar version of the same Pratt & Whitney engines mounted on the CSeries. Lufthansa has said it is delaying taking delivery of a second A320neo until engine problems, including lengthy startup times and software glitches, have been resolved.
Wojahn said those problems – the result of adapting an engine originally designed for Bombardier to suit the larger Airbus A320neo - are largely absent from the Swiss engine.
“There are some issues they’re working on the Pratt engine, but as we see it at the moment, they are under control,” Wojahn said.
A Pratt representative said the A320neo and Bombardier engines were different models, though both are based on Pratt’s geared turbofan engine architecture. The A320neo model was not adapted from the Bombardier engine, the representative said.Bombardier’s Dewar said there had been some early signs of slower startups, similar to those on the Airbus A320neo, but these had been removed on the CSeries version. He said the production ramp-up of the plane was going “very well.”
Bombardier said it expected a deal to sell 45 CSeries planes to Air Canada (AC.TO) to be completed in a “couple of months.”
Writing by Tim Hepher; Additional reporting by Alwyn Scott; Editing by Jane Merriman, Alexander Smith and Jonathan Oatis