Shares in the Canadian aerospace giant Bombardier surged more than 11% on Wednesday after reports said the company will receive significant investment from the Quebec government to fund the firm’s long-delayed CSeries jet program.
Development of the CSeries passenger jet has put a strain on the company’s finances.
The $1-billion investment will help get the CSeries jets to market and assuage concerns about Bombardier’s cash situation.
La Presse and Reuters cited confidential sources at Bombardier who said that the firm will announce the investment from the Quebec government when it reveals quarterly results on Thursday.
Montreal-based Bombardier is in the final stages of testing the C Series airliner.
There are two distinct yet similar models:
- The CS100 aircraft – capable of carrying between 100 and 133 passengers.
- The CS300 aircraft – suited for mid-sized markets with a capacity of up to 160 passengers per flight. The aircraft is designed for range of routes, including those serving transcontinental markets.
The company is believed to have enough cash on hand to finish the final steps of testing its CS100 jet and getting it certified. However, it may not have enough to complete the same necessary steps for its CS300 jet.
Earlier this year Airbus said that they turned down an offer to buy a majority share of the CSeries from Bombardier. However, the Quebec government have said that they will step in and help the firm if necessary. Bombardier is one of the largest employers in the province.
Analysts at Leeham Co forecast that Bombardier will lose $32-million per aircraft for the first two years they’re built and spend up to $2-billion of cash on the C Series program over the next two years.
The Reuters report also said that Bombardier has suspended its Learjet 85 program as another cost-saving move.