Bombardier delays first flight of CSeries for third time
TORONTO (Reuters) - Bombardier Inc (BBDb.TO) delayed the maiden flight of its CSeries jetliner for a third time on Wednesday, promising the flight "in the coming weeks" instead of July, a move likely to rattle airlines that have stepped up to buy the all-new plane.
"This might make people a bit jittery... This is a new market for them. A lot depends upon the confidence of customers," said aviation industry expert Richard Aboulafia, a vice-president at consulting firm Teal Group Corp.
The delay casts new doubt on Bombardier's ambitious mid-2014 entry-into-service target for the CSeries. Aboulafia expects entry-into-service sometime in the first half of 2015.
The first flight will be the culmination of a five-year, $3.4-billion development program for the CSeries, a fuel-efficient plane that is the first all-new narrow-bodied jetliner in decades.
Bombardier hopes eventually to corner 50 percent of the lucrative 100- to 149-seat airliner segment with the plane.
The Montreal-based company has announced 177 firm CSeries orders so far, far short of its target of at least 300 firm orders by the middle of next year. It failed to firm up new CSeries business last month at the Paris Air Show, which saw splashy news and big orders from its competitors.
"We are concerned that management credibility may be impacted with each subsequent delay, and should additional issues crop up over the course of the CSeries program, the benefit that investors are willing to provide could diminish," RBC analyst Walter Spracklin said in a client note, but added that a delay of a few weeks is not material from a cost and development perspective.
Bombardier shares, which had climbed nearly 11 percent since it announced a one-month delay last month, fell as much as 3 percent to C$4.92 on the Toronto Stock Exchange on Wednesday before paring losses.
Bombardier said that it was in its final stages of testing ahead of the first flight, but "highly technical" last steps were taking longer than anticipated. It said it expects to receive a flight test permit from Transport Canada in the coming weeks.
"Not welcome news, but it's still sounds like these are fairly small tactical stumbles," Aboulafia said. "But it's tough to tell because they're not exactly being transparent with the process."
Bombardier said in June it needed more time for additional software upgrades and that the inaugural flight would happen by the end of July. The first delay, due to an unspecified supplier problem, occurred last year.
The CSeries is Bombardier's bid to compete against bigger rivals Airbus EAD.PA and Boeing (BA.N). Bombardier says the plane will have a 15 percent cash operating cost advantage and a 20 percent fuel burn advantage over existing planes in the same class.
The plane can seat between 110 and 130, and a reconfigured version of the larger version will be able to seat 160. It is designed to be quiet, and some fans have dubbed it the "whisper jet".
(Reporting by Solarina Ho; Editing by Janet Guttsman; and Peter Galloway)