DAL Delta Air Lines Inc

Canadian plane and train maker Bombardier Inc. on Tuesday cut its 2016 delivery guidance for its new CSeries aircraft by more than half, citing engine delivery delays by supplier Pratt & Whitney.

Montreal-based Bombardier, which delivered its first CSeries jet to launch operator Swiss International Air Lines in late June, said it now expects to deliver seven CSeries planes this year, down from 15.

"We are working very closely with Pratt & Whitney to quickly address this supplier ramp-up issue and to ensure we have a strong supplier base to support our long-term growth objectives," Fred Cromer, president of the company's commercial aircraft operations, said.

He added that the company expects to meet its production goal of 90 to 120 aircraft each year by 2020.

Pratt & Whitney, a unit of United Technologies Corp., has grappled with parts-supply delays for its new "geared turbofan" engines, which are offered on Bombardier's CSeries planes. The engine delays have also affected shipments of A320neo single-aisle jets from Bombardier competitor Airbus Group SE.

Bombardier has been ramping up production of its new CSeries commercial aircraft, which started flying paying passengers in mid-July, as it continues turnaround efforts amid a soft business-jet market. .

The company said the reduced CSeries deliveries will result in lower revenue for its commercial aircraft division this year, but that it still expects a "strong liquidity position" at year-end and remains on track to meet its 2018 cash-flow neutral goal.

Bombardier said it now expects revenue to be close to the lower end of the $16.5 billion to $17.5 billion guidance range, while free cash flow usage is expected to be in the range of $1.15 billion to $1.45 billion, compared with $1.0 billion to $1.3 billion previously.

The news is the latest setback for the company, which swung to a loss on lower revenue in its latest quarter ended June 30. Investors continue to be on the lookout for additional CSeries contracts as the plane maker's debt load remains heavy.

Bombardier shares are down 4% early Tuesday following the company's update.

In June, Bombardier reached a landmark deal with Delta Air Lines Inc. for up to 125 of its new single-aisle jets, including a firm order for 75 planes and options for another 50. Later that same month, Bombardier finalized a deal with Canadian carrier Air Canada for a firm order for 45 CSeries aircraft and options for another 30.

Bombardier said Tuesday that the two CSeries aircraft in service with launch customer Swiss International Air Lines, a unit of Deutsche Lufthansa AG, have flown nearly accumulated almost 600 flight hours. It said a third CS100 aircraft, the smaller of the two new CSeries jetliners, is expected to be delivered to Swiss next month. The larger CS300 version is expected to enter service with airBaltic in the fourth quarter.

Write to Judy McKinnon at judy.mckinnon@wsj.com

(END) Dow Jones Newswires

September 06, 2016 11:05 ET (15:05 GMT)

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