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By Tim Hepher and Victoria Bryan
DOHA, June 2 Canada's Bombardier Inc has narrowed its investigation of an engine failure on its new CSeries airliner to a few possible causes and said the test plane could be back in the air quickly if the cause turns out to be what the company suspects.
Guy Hachey, president of Bombardier Aerospace, declined on Monday to describe last week's incident in detail, but said the company hopes to understand more later this week.
"We are narrowing it down to a few possible causes and we should hopefully, as the week evolves, get to a most likely, if not a root, cause," he told Reuters in an interview in Doha.
"At that point we will be able to talk more about what is the way forward," Hachey said on the sidelines of the International Air Transport Association's (IATA) annual meeting.
News of a problem with the plane's newly developed Pratt & Whitney geared turbofan (GTF) engine had sparked fears of a delay in the already-overdue program, and Bombardier's stock fell for a second day on Monday.
But analysts predicted the failure, during stationary maintenance testing last Thursday, likely would have only limited long-term effects on the engine maker, plane maker or airlines who have ordered the CSeries. Stock of Pratt parent United Technologies Corp rose.
The incident "raises a red flag," said Peter Arment, an analyst who follows United Technologies for Sterne Agee.
But he added: "This probably still points to more of an anomaly that has very limited impact on the overall geared turbofan program."
"SOME DAMAGE" TO PLANE
A senior industry source said the problem may have been caused by an oil shortage or "oil starvation" inside the engine, but that could not be confirmed.
Hachey declined to discuss specifics, or to say whether the incident could be categorised as an "uncontained engine failure" - jargon for a usually violent engine explosion that can produce debris.
"I am not going to get into that because there is a lot of speculation. I can tell you there is some damage to the aircraft and the damage is manageable and we are going to be able to fix the aircraft," he said, adding, "I have read that we are going to scrap the aircraft and that is not the case."
If the root cause turns out to be something that the company suspects, "we will find ways to get back in the air quickly," Hachey said. "If it is something that we didn't expect, then we will have to see what it is."
He said there was no reason to adjust the company's target of delivering the first CSeries aircraft to Sweden's Malmo Aviation via a leasing company in the second half of 2015.
"With what I know today ... we still feel comfortable we can achieve the target for the second half of 2015."
Asked if the aircraft could return to flight testing quickly, he said, "that is what we hope."
News of the engine failure emerged on Friday, sending Bombardier stock down 1.9 percent and fueling speculation about the cause and whether it could mean a costly, time-consuming redesign of the engine.
The CSeries jetliner, which Bombardier has spent billions developing and will compete in the narrow-body jet market with Boeing Co 737 MAX, as well as the Airbus A320neo, is already 18 to 24 months behind schedule.
For Pratt, the GTF represents somewhat of a comeback for the engine maker's commercial jetliner business, and offers better fuel efficiency than prior models.
Aside from Bombardier, Pratt is selling versions of the GTF for Airbus Group NV's new single-aisle plane, the A320neo, as well as to Embraer SA, Mitsubishi and Russia's Irkut.
But those concerns appeared somewhat mollified on Monday, though speculation continued, especially at the IATA meeting of aviation leaders in Doha.
"Given the engine's extensive tests to date, we doubt that it resulted from a fundamental flaw that will require a costly major redesign," said Cowen and Co analyst Cai von Rumohr in a client note.
He speculated that the incident was more likely due to faulty parts, an operational issue, or some other factor that would not jeopardize the Pratt's new GTF program.
Bombardier has shipped the damaged engine to Pratt & Whitney's home base in Connecticut for further investigation.
Pratt said in a statement that the cause of the failure has not yet been determined, and declined to comment further.
Shares in Bombardier fell another 0.8 percent to C$3.66 by 3:30 pm ET.. Shares in Pratt & Whitney's parent United Technologies were up 0.8 percent at $117.17.
Canada's Transportation Safety Board has asked to take part in the investigation of the incident involving the GTF engine.
NO AIRBUS LINK
Hachey said there was no link between last Thursday's incident and an earlier one involving an engine of the same family being developed as an option for powering the A320neo. Airbus so far has sold more than 800 A320neos for which airlines have opted to have Pratt's GTF engine.
In Doha on Monday, CSeries customer Swiss International Air Lines AG also said it did not expect the engine incident to cause any major delays to deliveries of the 30 aircraft which it has ordered.
"I don't think it will have a major effect on delivery dates. In tests, you make allowances for such things to happen, although it is better that they don't happen" Harry Hohmeister, CEO of the Lufthansa-owned carrier, told Reuters.
Hachey could not say whether Bombardier would bring the jet to July's Farnborough Airshow, the industry's biggest showcase of the year and often a platform for sales. Testing the aircraft has been a priority and "will be even more so now," he said.
Bombardier has carried out just under 330 test hours on over 100 flights and Hachey said it was on track to reach 300 orders for the CSeries from 20 customers by the time the plane enters service. Bombardier says so far it has 203 firm orders from 18 customers and plans eventually to produce 120 of the aircraft a year. (Additional reporting by Solarina Ho in Toronto and Lewis Krauskopf in New York; Editing by Alwyn Scott, Jane Merriman and Greg Mahlich and Marguerita Choy)
* Sterling poised for winning week as political woes hit euro
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