Bombardier's commercial aircraft division could be confronting a make-or-break year in 2012 with a dwindling order backlog and growing schedule pressure on its biggest development programme.
Sales for Bombardier Aerospace declined by 2.23% in 2011 to $8.6 billion, and profit margins dipped by 0.5 percentage points. While business jet sales remained healthy, new orders for the company's CRJ regional jets and Dash 8 Q400 turboprops plunged.
Now the company plans to deliver 55 new aircraft in 2012 and has a backlog of 64 aircraft. The pressure is on Bombardier's recently reorganized sales force to re-stock the backlog, or else enter 2013 still hoping to fill orders to support a full year of production.
"We're planning to have a book to bill [ratio] of above one and we're off to a good start," said Pierre Beaudoin, president and chief executive of Bombardier, addressing analysts on a teleconference to discuss its 2011 earnings.
The company has already collected orders and options for 40 turboprops and regional jets in the first two months of 2012, he said.
"We needed to increase sales forces in new markets where in the past we didn't need to go there for our regional airplanes," he said. "Today we're being very aggressive so we don't miss any opportunity."
The key for Bombardier will be winning new orders in North America and Europe. Beaudoin specifically cited Calgary-based WestJet's requirement for new turboprops as a key opportunity for new Q400 orders.
Analysts also wanted to hear more specifics about the development schedule for the CSeries, but Beaudoin declined to reveal any milestones besides repeating the company's goal to achieve first flight by the end of the year.
Right now, the components of the first CSeries test vehicle are still scattered in at least three different facilities on two continents. Beaudoin described seeing "several cockpits", a wing, a centre fuselage and a rear fuselage in advanced stages of assembly, while major systems are being installed in the complete integrated aircraft systems test area (CIASTA).
"We have a good plan and I'm excited about it," Beaudoin said. But he also noted that the fly-by-wire CSeries is "very complex".
"All these parts have to come together," he said, "and they have to work together."
Source: Air Transport Intelligence news