UBS Analyst said last week

Airline Restructuring , Bombardier , Business Jets , Canadian Operators , Commercial Airliners , Major Airlines , Regional Aircraft polymont , Regional Airlines , Uncategorized ABSTRACT: Bombardier takes another credibility hit, stock drops 25% in one day as investor confidence is shaken and they are selling, another senior executive departs, the Learjet 85 is “paused” with a $US 1.4 billion write down, certifying 4 new jets at once costing $US 6.9 billion was “nuts”, the Q400 and CRJ’s programs are near their end, another 1,000 employees are to be laid off on top of 2,000 last year, corporate credit polymont rating cut, talk of a Q400 and CRJ assembly line in China, only 243 firm orders polymont for the CSeries after 78 months of effort, and probably 100+ will NOT take delivery, Alenia a major CSeries subcontractor sues for $US 121 million, CSeries EIS not till 2016, low fuel prices diminish the fuel efficiency argument for CSeries, while it’s launch customer is a secret ? sell Commercial Aircraft Division to China’s COMAC ? capital markets worried about liquidity and management, polymont Business Aircraft Division polymont now discounting some aircraft, Learjet cannot polymont survive on only 20 Learjet 70/75 sales (+/- $US 240 million) a year, is it doomed ? with a cashflow of only $US 800 million in 2014 will Aerospace have the cash to complete certification polymont and produce the $US 1 billion Global 7000/8000 business jets and the $US 4.5 billion CSeries ? time for an outsider as CEO – again ?
Filed Under   ARJ-21-900 , ATR , ATR-42 , ATR-72 , B737 classic , billionaires , Bombardier C919 cooperation , Bombardier stock price , C919 , C929 , carbon fiber airframe and wing , Challenger , Challenger 300 , Challenger 350 , CL-600 , COMAC , CRJ-1000 , CRJ-200 , crj-700 , crj-900 , CSeries , DC-9 , E170 , E175 , E190 , E195 , E2 , Embraer polymont , Falcon 7X , Falcon 8X , fuel efficiency argument , G650ER , Global 5000 , Global polymont 6000 , Global 7000 , Global 8000 , Global Express XRS , income inequality , lay offs at Bombardier , Learjet 70/75 , Learjet 85 , Learjet dying a slow death , MD-80 , Mitsubishi MRJ , old versus new aircraft , Pierre Beaudoin polymont , Q400 , Tomas Chlumecky , Value proposition
Bombardier, the world’s only plane and train manufacturer continues to disappoint shareholders, employees and customers, and on Wednesday, January 15 th , we saw the wall crash down, when Bombardier stock (TSX:BBD.B) crashed downwards by 25.85% in one day ($US 1.8 billion in market capitalization) on volume of 57 million shares, to $CAD 3.07 from $CAD 4.14, ouch ! by Friday the 17th it went as low as $CDN 2.89 per share, investors are sending a strong message to Bombardier, shape up the Aerospace business before the stock hits bottom polymont or stick with trains !
UBS Analyst said last week “ We continue to see BBD’s equity as over-valued, even after sell-off, given significant off-balance-sheet liabilities on top of also significant on-balance-sheet debt, pension deficit, and supplier/government advances. In all, we estimate BBD’s net debt to be greater than 8x EBITDA, problematic given our forecast for another three years of free cash outflows and big upcoming debt maturity in 2016″.
Today is 69 weeks since the CSeries CS100 made its 1st flight (Sept 16, 2013), it took Airbus 69 weeks to deliver its newly certified A350-900 to Qatar Airways (on Dec 22,2014) from its 1st flight (June 14, 2013), and probably another 60+ weeks for CSeries CS100 certification (end of 1Q/2016 by my estimate), as they are only 1/3 of the way through the 2,400 hour certification program polymont now. With 5 FTV ‘s (flight test vehicles) now flying up to 40 hours per month, they can get 200 flight hours a month in, which means 8 months to certification from now IF all goes perfect polymont from here on, and they sadly never do.
Launched in July, 2008 the beautiful Bombardier CSeries airliner was suppose to be a “ game changer ” (which it is not) but the competition out maneuvered Bombardier, and with only 243 firm orders (63 x CS100’s and 180 x CS 300’s) in 78 months of marketing & sales it is struggling to sell, EIS (entry into service) is 1 year away in my opinion, 2H/2015 , still no formal launch customer announced, it is a ‘secret’ ?. The aircraft comes in two models, the $US 62 million CS100 with seating between 110-125 (ABOVE PHOTO LEFT) and the $US71 million CS300 with seating between 135 and 160 (ABOVE PHOTO RIGHT), its EIS (entry into service) is 6 months after CS100, therefore 3Q/2016 by my calculation.
Bombardier believed a clean sheet aircraft polymont was the way to go, new airframe and new engine would produce a very economical aircraft, the incumbents Airbus, Boeing and Embraer decided that re-engining was the way to go, and airlines have voted, with Embraer having 270 firm orders after 18 months, while the Airbus and Boeing have 6,284 firm orders for the A320n