Bombardier Inc. could be set to announce next week that it won’t meet its forecast for delivering about 30 C Series jets this year because of a lack of engines for the new commercial aircraft.
The Montreal-based company said it is reviewing its delivery plans for 2017 and will provide an update on Nov. 2 when it unveils its third-quarter results. The company has delivered 19 C Series to date, including 12 so far in 2017.
Bombardier (TSX:BBD.B) was responding after United Technologies Inc. (TSX:UTX), the maker of the Pratt & Whitney geared turbofan engines, told analysts Tuesday that it recently decided to hold back some engine shipments to Bombardier and Airbus so it could offer spare engines to keep airlines flying the C Series and A320neo aircraft daily.
“It was unfortunate that we couldn’t meet our commitments to Airbus and Boeing, or Airbus and Bombardier, but they understood the need to keep the airline customers up flying and we’ve done I think the right thing for the business in the long term,” UTC president and CEO Gregory Hayes said in a conference call.
UTC said Pratt shipped 120 geared turbofan engines during the quarter, putting it on track to ship 350 to 400 engines for this fiscal year and nearly doubling that the following year.
The U.S. based conglomerate said it should certify a combustor upgrade to incorporate into new engines in the fourth quarter.
Pratt shipped upgraded hardware for seal issues earlier in the year to address problems that surfaced in the new engines.
“While we’re still seeing some success with the actions we’ve taken to date, we’re also looking at design alternatives that are expected to further improve durability in the engine,” Hayes said.
Pratt took a US$196 million charge in the third quarter related to the engines, but commercial sales rose 31 per cent in the quarter primarily due to higher geared turbofan engine deliveries.
Meanwhile, UTC said the purchase of a majority stake in the C Series by Airbus validates the performance of the engines, otherwise the European aircraft manufacturer wouldn’t have struck the agreement.
Hayes said UTC subsidiaries United Technologies Aerospace Systems, Pratt and Rockwell Collins have a total of 34 per cent- to 35-per cent content on the plane.
“We have a big chunk of the bill-of-material and therefore a big investment in this aircraft and a lot at stake in seeing that it’s successful,” he said. “And I think long-term it would be a good deal for UTC as well given the content that we have on the aircraft.”