We've speculated for months now that Bombardier will have to sell the CSeries below cost (at a loss), and now we have some idea of the magnitude of that loss.
Bombardier will take a one-time charge of $500 million to cover "onerous contract" provisions relating to the Delta and Air Canada orders, and to a lesser extent the recent Air Baltic top up.
So back-of-the-envelope calculation means they are losing roughly $4 million per aircraft. And since most of this loss likely relate to Delta's CS100 orders (cheaper / less margin), that loss might equate to roughly 75% discount or higher.
Some observations:
Make no mistake, as been said many times here, at this juncture Bombardier needs to do "whatever it takes" to win key contracts. The alternative is to fold the program.
$500 million accounting loss isn't massive in the big scheme of things. But it also represents fully half of Quebec's incoming $1 billion investment, spent on essentially just two deals.
To put it another way, Quebec taxpayers have effectively given Delta a $300 million subsidy -- undoubtedly a great arrangement for Delta -- and partly explains why Embraer could not compete in the deal even with used aircraft.
Clearly neither Bombardier, Quebec (nor the Federal Government) can afford to keep losing hundreds of millions per deal. Hence aggressive cost cutting must be part of the equation -- which is why Bombardier needs to continue its outsourcing strategy regardless of any future investments.
We're still seeing the CSeries competing on the low-end market against regional jets. They need to find a strategy to pick up CS300 orders instead of CS100s. They are not yet finding that "mid-size" gap between regionals & single-aisles the CSeries is supposed to address, which essential to their long term business case.