MONTREAL – Bombardier’s CEO says that the company was a little late on chasing opportunities in Iran but should be able to catch up with its rivals following Canada’s lifting of sanctions.
“We started maybe a little bit behind but I’m pretty sure we’re going to be able to catch up now,” Alain Bellemare said in an interview.
He said Foreign Affairs Minister Stephane Dion’s move earlier this year to lift sanctions has been useful in helping to gain market access.
With teams on the ground now in Iran, Bellemare said he’s not concerned about winning its share of new orders, although the process is challenging.
The Montreal-based plane and train maker (TSX:BBD.B) sees opportunities to sell regional rail services along with regional jets and CSeries planes as Iranian companies look to modernize.
Meanwhile, Bellemare said Bombardier will fine-tune but not overhaul its CRJ regional jets as it focuses on production of the new CSeries aircraft that will be the company’s main driver of commercial aircraft growth for years to come.
He said the company is working on adding a bit more cabin space to CRJs to address the size advantage of Brazilian rival Embraer’s E-Jets.
“We’re looking at ways to improve that but you’re not going to see a major upgrade on the CRJ,” he said in Ottawa. “It’s going to be fine-tuning because customers flying it today like it.”
Since launching in 1992, Bombardier has received about 1,900 CRJ orders. Embraer has eaten into Bombardier’s industry-leading market share in recent years, selling more than 1,500 aircraft since 2004.
New players entering the regional jet market include Russia’s Sukhoi and Japan’s Mitsubishi MRJs.
Bellemare said Bombardier’s new Global 7000 business jet is “a few weeks away” from its first flight after completing its first engine runs.
Launched in 2010, the long-range Global 7000 and 8000 business jets meant to better compete with new aircraft from rival Gulfstream are more than two years behind schedule following changes to the wing. The 17-passenger Global 7000 priced at US$73 million is scheduled to enter into service in late 2018.
On Thursday, DBRS confirmed its rating of Bombardier at B with a negative trend. It said the rating reflected the “highly speculative credit quality and high level of uncertainty regarding its ability to meet financial obligations.”
DBRS said Bombardier has enough cash for at least 12 months after receiving a US$1 billion investment from the Quebec government and sale of a 30-per-cent stake in its railway division to Quebec’s pension fund manager. The federal government said it is also willing to invest in the company nearly a year after a request for US$1 billion in funding was made.
— With files from Andy Blatchford
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