The demands of four new jet aircraft development programs, coupled with anemic sales of its Learjet business jet brand and regional jets, fueled a cash burn pyre that persuaded analysts to issue a fresh round of stock downgrades for Bombardier in September. In the last quarter, the OEM drew down $1 billion of cash reserves against $211 of net income, double for the same period a year ago. Its market capitalization is $7 billion and the cash burn rate set off caution lights for stock analysts. The news is not cataclysmic; most now rate the company as “market perform,” but from early July through the end of September, Bombardier stock lost 43 percent of its value.
Hopes that the company’s new CSeries single aisle “super-regional” 110- to 149-seat jet would take big market share away from Airbus and Boeing appear to be fading, at least for now, as both of those companies announced re-engine programs and big orders for their legacy narrowbodies. New competition from the Russian Sukhoi Superjet and aircraft under development in Japan and China could also crimp its CSeries ambitions.
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