The First CSeries aircraft is delivered to SWISS

SWISS originally ordered 20 CS100s and 10 CS300s, plus 30 options, but then converted five 100s to the 300 variant.

Bombardier delivered the first CSeries aircraft to Lufthansa subsidiary Swiss International Air Lines (SWISS), at ceremonies in Montreal Wednesday.

The June 29 delivery marks an important milestone in an aircraft program beset with technical problems, delays and difficulty securing customers.

Bombardier essentially relaunched the CSeries program after program delays and a slow start in sales, put the program in question.

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On June 23, Bombardier signed a definitive agreement with the Quebec government for a $1 billion investment in the CSeries program. The assets, liabilities and obligations of the program have been transferred to the CSeries Aircraft Limited Partnership (CSALP), of which 50.5% is owned by Bombardier and 49.5% by the provincial government through Investissement Quebec.

Wednesday’s handover should begin a process in which SWISS will receive nine aircraft by year end, taking one aircraft per month in July, August and September. After that, deliveries will increase to two aircraft per month. The first aircraft will enter service July 15, Bombardier said.

The money will be used for cash-flow purposes, and represents half of the $2 billion Bombardier says is required to take the CSeries program to cash-flow positive production in 2020.

These milestones followed US and European certification of the CS100, the initial CSeries variant, on June 15. Transport Canada certified the CS100 in December. Type validation by the FAA and European Aviation Safety Agency followed an extended, 650-hr., function and reliability test campaign that included route-proving flights for SWISS.

The $2 billion includes funds to cover losses on discounted sales to marquee customers, including the crucial Air Canada and US-based Delta Air Lines deals for which Bombardier will record a $500 million charge this quarter to cover “onerous contract provisions.”

Air Canada placed an order for 45 firm CS300s and 30 options in February, which it finalized this week. Delta signed a $5.6 billion contract for 75 firm CS100s and 50 options in April.

Bombardier said it will retain operational control of the CSeries program and consolidate its financial results. Bombardier Commercial Aircraft president Fred Cromer will also serve as president of CSALP. Bombardier will nominate three members of the partnership’s board, including its counsel Daniel Johnson as chairman. Quebec will nominate two.

The Canadian federal government, meanwhile, confirmed it is continuing negotiations with Bombardier about investing in the CSeries partnership. If concluded, this would leave Bombardier with a minority stake in CSALP, but still with operational control of the program.

Bombardier CEO Alain Bellemare, who took over in February 2015, is overseeing the relaunched program.

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