ERJ Embraer SA

DUBLIN—Bombardier Inc. is looking to build on a landmark deal with Delta Air Lines Inc. to win deals for its CSeries single-aisle planes from budget carriers as it battles to cement its position as a rival to Boeing Co. and Airbus Group SE.

"Are we looking at specific regions to try and penetrate? Yes. Are we looking at different business plans to prove the aircraft works in a low-cost environment? Yes," said Fred Cromer, president of Bombardier Commercial Aircraft. He wouldn't project when any deals would come through.

The April deal with Delta, the No. 2 U.S. airline by passenger traffic, offered the Canadian transportation company a chance to fortify its shaky order book with a firm deal for 75 CSeries jets and options for 50 more.

The company is looking to sustain its commercial momentum. Air Canada said in February that it would buy as many as 75 of the planes. It joins Deutsche Lufthansa AG's Swiss International Air Lines unit and Korean Air Lines Co. as the most widely recognized buyers of the plane.

"It puts a different spin on the program in a very positive way, which is now bringing even more inquiries into what is this plane," Mr. Cromer said.

Bombardier had struggled for years to win orders for the CSeries planes amid fierce competition from Boeing and Airbus. John Leahy, Airbus's chief operating officer for customers, played down the significance of the deal, saying that based on industry rumors about the deal's closely guarded price, Bombardier was losing up to $7 million a plane on the transaction.

Bombardier Chief Executive Alain Bellemare said, "The contract is totally typical for what you see when you launch a brand new program." He said production costs remain high and that pricing is aggressive to build a customer base. "Everybody in the industry has the same experience," he said.

The pricing is consistent with long-term financial plans Bombardier detailed to investors late last year, Mr. Cromer said. The program should break even on a per-plane basis around 2020 or 2021, he said.

The CSeries is due to enter service in the coming weeks with Swiss meeting its performance targets, Mr. Cromer said. Lufthansa Chief Executive Carsten Spohr has said the plane is more efficient than expected.

Mr. Cromer said Bombardier would continue to look for ways to boost performance.

The Delta Air Lines deal means they won't be able to produce planes for new customers for a couple of years. Bombardier is gradually increasing production of the CSeries. It expects to ship 15 to 20 planes this year and about double that in 2017. Annual output should reach around 120 aircraft a year toward the end of the decade, Mr. Cromer said.

The company's five-year plan to generate positive cash flow from the CSeries leaves the company burning resources over the next half decade, relying on its established products to pay for the program's losses. Bombardier announced Wednesday a deal for nine Q400 turboprop aircraft for Canadian low-cost carrier WestJet's fast-growing regional arm, Encore.

With the bulk of the multiyear development of the CSeries nearing its end, Bombardier also could use freed-up engineering resources to refine some of its more established planes, including the CRJ series of regional jetliners.

Last month its principal rival in that market, Brazilian plane maker Embraer SA, flew for the first time a more fuel-efficient version of its regional plane. The plane is due to enter service in the first half of 2018, adding pressure on Bombardier to keep its models competitive.

Mr. Cromer said the new Embraer plane "will certainly provide an opportunity for us to relook at the CRJ." The Canadian company unveiled in May a new cabin for its planes and, Mr. Cromer said, there is potential for more refinements. He didn't specify what they might be.

Write to Robert Wall at robert.wall@wsj.com and Jon Ostrower at jon.ostrower@wsj.com

(END) Dow Jones Newswires

June 01, 2016 14:35 ET (18:35 GMT)

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