By Bjorn Fehrm

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Introduction

Nov. 02, 2015, ©. Leeham Co: Bombardier (BBD) held its 3Q 2015 call last week and gave further information around the cash needed to bring the CSeries program to market. We now take the chance to compare our forecast of the program’s costs with the information that could be gleaned from the 3Q report and analyst call.

Overall, it can be said that OEM’s don’t want market analysts to have to detailed information. The answers on the analysts’ questions are as general as possible and one has to collect bits and pieces to build a picture. When doing this, it helps that one has modeled the whole problem beforehand. The OEM’s sparse data points can then be fitted like puzzle pieces into the larger picture and one can see if there is a fit or not.

Here is what we found.

Summary:

• Overall, the communicated 3Q results and needs of the CSeries program fit well with our forecast.
• BBD’s CEO, Alain Bellemare, said, however, on Canadian TV that Leeham’s forecast of a loss of $32m per aircraft for the first 50 “is not correct”.
• With the data that was communicated we have to be close. There is a plausible explanation why we and Bellemare could both be correct; we explain why.