* Cuts CSeries delivery forecast to seven from 15 aircraft
* Says FY revenue likely at low end of range
* Shares in Bombardier down 4.7 percent
* Lufthansa's Swiss to take fewer deliveries this year
* Bombardier reaffirms long-term production target
(Adds analyst comment, updates shares)
By Allison Lampert
MONTREAL, Sept 6 Bombardier Inc
sliced in half the 2016 delivery forecast
for its CSeries aircraft on Tuesday and said it expected
full-year revenue to be at the lower end of its previously
The setback is the latest for the CSeries program, which
took years to get off the ground and has been hit by production
delays and cost overruns, causing the Montreal-based plane and
train maker to agree to a C$1 billion ($774 million) investment
from the Quebec government.
The company remained in talks with the Canadian federal
government about possible funding, and some analysts said the
delays could add to concerns about its financial strength.
"Bombardier has a lot of debt, limited financial flexibility
and these kind of setbacks, even when they are modest and
transient, can heighten concerns", said one transport analyst
who asked not to be named.
Desjardins analyst Benoit Peorier said the development was
"slightly negative" and "unexpected."
Shares in the company were down 4.7 percent to C$2.02.
Bombardier expects to deliver seven of the planes this year,
compared with its earlier forecast of 15, blaming engine
delivery delays by supplier Pratt & Whitney, a unit of United
The CSeries jets, which have between 100 and 160 seats and
are designed for short- and medium-haul travel, entered service
earlier in 2016. Bombardier hopes to compete with Boeing Co
and Airbus in the single-aisle jet market.
Lufthansa AG unit Swiss International Air Lines
confirmed on Tuesday it expected to take delivery of fewer
CSeries planes from Bombardier than initially planned this year,
due to the engine delays. It had anticipated receiving nine, but
declined to say how many it now expected.
Bombardier now expects to be close to the lower end of the
$16.5 billion to $17.5 billion revenue range for the full year.
However, it reaffirmed its outlook for 2016 revenue and earnings
before interest and taxes.
Bombardier said it was working closely with Pratt & Whitney
to quickly address the engine problem and remained confident it
could meet its production goal of 90 to 120 aircraft per year by
A Bombardier spokeswoman said the delays would also affect
deliveries to airBaltic, the launch customer for the company's
larger CS300 jet, but should not have an impact on orders
further down the road from carriers Air Canada and Delta
Air Lines Inc.
Pratt & Whitney is facing heavy demand from aircraft makers
and has 8,200 orders and options for the fuel-efficient GTF
engine family, which is also being used in the Airbus
"In terms of production, we've made significant headway in
the supply chain, but there is some pressure on new engine
deliveries for this year," said Sara Banda, a spokeswoman for
U.S.-based Pratt & Whitney.
Banda could not say how the pressure on new engine
deliveries would affect other aircraft makers.
Airbus has said it is receiving newly revised engines from
Pratt & Whitney after delays caused by software error messages
and slow start-up times.
($1 = 1.2912 Canadian dollars)
(Reporting by Subrat Patnaik and Narottam Medhora in Bengaluru,
additional reporting by Matt Scuffham in Toronto, Tim Hepher in
Paris and Vicki Bryan in Frankfurt; editing by Sayantani Ghosh
and Jeffrey Benkoe)