Bombardier Inc. (BBD/B) delayed the maiden flight of its CSeries jet again, pushing the plane’s first takeoff into July only days after saying the company’s largest-ever model would meet a June deadline.
The new goal is for a debut by the end of next month, Montreal-based Bombardier said today in a statement. The extra time will allow for additional software upgrades “for improved system maturity and functionality,” the company said.
Bombardier’s move adds to the struggles of its first full-size airliner, a challenger to the Boeing Co.-Airbus SAS duopoly on narrow-body planes. The company set the June target in November, scrapping plans for a December flight, and Bombardier Aerospace President Guy Hachey had reaffirmed that schedule as recently as June 16 in an interview at the Paris Air Show.
“This is a bit of disappointment, given what they said even recently,” Chris Murray, a PI Financial Corp. analyst, said in a telephone interview from Toronto. Bombardier’s chief challenge is now meeting its mid-2014 timetable for getting the CSeries in commercial service, he said.
That goal remains in place, a Bombardier spokesman, Marc Duchesne, said today by e-mail. Vice President Rob Dewar, the general manager of the CSeries, told Bloomberg News June 7 that a mid-2014 entry into service was a “challenging target.”
Bombardier’s widely traded Class B shares slid 2.1 percent to C$4.57 at the close in Toronto. The drop cut their gain this year to 22 percent.
The CSeries will seat about 110 to 160 passengers, a step up in size from Bombardier’s signature regional jets and turboprops. Bombardier, which also builds trains and business jets, is counting on new products such as the CSeries to help meet a goal of almost doubling revenue by the end of the decade.
Chief Executive Officer Pierre Beaudoin told investors at a March 21 briefing that the CSeries alone will probably contribute $5 billion to $8 billion in additional annual sales.
Airlines and lessors have been slow to embrace the plane. Bombardier has booked 177 orders so far, short of a goal of 300 by the 2014 target for entering commercial service. The CSeries won no new commitments at last week’s Paris expo, the industry’s biggest annual showcase for new products.
Today’s announcement “doesn’t help confidence,” Murray said. “These are challenging programs. Are further delays possible? Definitely, but at this point I’ve got limited expectations for production deliveries in 2014 anyway.”
The CSeries will cost about 15 percent less to operate and burn about 20 percent less fuel than peers, Bombardier has said. The plane will feature composite materials and the new geared turbofan engine from United Technologies Corp. (UTX:US)’s Pratt & Whitney. It will also be the first Bombardier jet to fully adopt a so-called fly-by-wire system, which translates pilots’ commands into electronic impulses that activate flight controls.
Bombardier’s Duchesne said today’s delay isn’t linked to the fly-by-wire system, which Hachey had identified last year as a challenge to meeting the original timeline for a 2012 maiden flight. Duchesne declined to provide the exact reasons for the postponement.
“Many airlines are adopting a ‘show me’ approach prior to placing orders for the CSeries,” Benoit Poirier, an analyst at Desjardins Capital Markets in Montreal, said today in a note to clients. He rates Bombardier as buy, as does Murray.
Qatar Airways CEO Akbar Al Baker told reporters at the Paris Air Show on June 17 that he still has “interest in CSeries, but we want it to fly.”
The carrier is seeking confirmation of “the outstanding performance that was promised during the time we negotiated with them,” Al Baker said. “Once all this is resolved and that the aircraft is well in its flight test, we will then look into it. We are talking to Bombardier about it.”
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