(Benjamin Zhang/Business Insider)
Bombardier Aerospace announced late last week that Delta Air Lines agreed to order 75 of the company's C Series airliners in a deal worth up to $5.6 billion.
The landmark order was a watershed moment for the Canadian airplane maker and its critically acclaimed but slow-selling jet.
Although Bombardier has long been an industry leader in business and regional jets, the C Series marked the first time the company had to compete directly against industry titans Boeing and Airbus.
For much of its decade-long history, the C Series program has been beset with a continuous string of troubles. At last count, the aircraft was two years late and about $2 billion over budget.
Last year, Bombardier was forced to write down more than $4 billion and take $1 billion cash injection from the Quebec government.
Although Bombardier managed to land a 45-aircraft commitment from Air Canada in February, the airline has yet to convert the commitment into firm orders. Further, critics of the deal cite Bombardier's close ties with the Canadian government as the main reason the order.
As a result, Bombardier needed to secure an order from another major North American airline to validate the long-term viability of the C Series.
After failing twice to secure orders from United Airlines this year, Bombardier finally struck pay dirt with Delta.
The fallout from the Delta deal will likely have far-reaching implications for Bombardier.
"The Delta order has generated a lot of optimism around the C Series program," Moody's vice president and senior analyst Jamie Koutsoukis told Business Insider.
However, Bombardier is not out of the woods yet financially.
"The debt load is still very onerous considering the capital intensive nature of their business," Koutsoukis added.
(REUTERS/Pascal Rossignol)
The C Series won't be profitable until 2020 and Bombardier is expected to sink another $2 billion into the program. The company also announced, recently, that it will take a $500 million charge in the second quarter of 2016 on 127 aircraft, meaning the planes sold to Delta were likely sold at loss of up to $4 million per plane.
Fortunately for Bombardier, the company seems to have a very good plane on their hands.
Virtually everyone who has experienced the C Series are universal in their praise for the aircraft. However, with just 318 total firm orders, Bombardier desperately need to convert interest into customers.
However, many of the plane's potential buyers have been scared off by the lack of C Series orders.
(Benjamin Zhang/Business Insider)