TORONTO Aug 29 Bombardier Inc's
troubled aerospace business faces more upheaval as a Swedish
carrier backed out as the first customer to start commercial
flights with its new CSeries jet and the Canadian firm said more
senior aerospace executives will be laid off.
Malmo Aviation, owned by Sweden's Braathens Aviation, was
slated to be the first CSeries customer to take delivery of the
new jet in the second half of 2015, but the airline said on
Friday that will no longer be the case. It cited worries about
further delays after a May engine failure grounded the jets.
"It has subsequently emerged that this may cause another
delay to the CSeries introduction," Braathens said in its
second-quarter 2014 report.
"We have informed Bombardier that we will not assume the
role of formal launch operator of the aircraft type."
Bombardier shares closed down 3.2 percent on the Toronto
Braathens said due to the increased uncertainty, it was in
discussion with Bombardier about other possible changes to the
delivery schedule. The Swedish firm has ordered 10 CSeries
"Per the original contract the first CS100 should have been
delivered by now - mid 2014," Geir Stormorken, a spokesman for
Braathens, said in an email.
Bombardier spokesman Marc Duchesne said Malmo notified the
company of its intentions several days ago.
Bombardier hopes the CSeries, which claims superior
operating and fuel efficiencies, will win a sizeable portion of
the 100- to 149-seat jet market, but many airlines are taking a
wait-and-see stance as it undergoes flight tests.
The Montreal-based plane maker has restructured its
aerospace division recently to cut costs and help address delays
in the CSeries jet program.
"You can anticipate that a few other (aerospace) leaders
will also be let go," Isabelle Gauthier, Bombardier's senior
aerospace spokeswoman, said.
The ambitious multibillion dollar CSeries program gives the
Canadian plane and train maker a foothold in the larger
commercial jetliner segment, pitting it against the smaller
planes made by Boeing Co and Airbus Group.
Bombardier has said test flights would resume "in the coming
weeks" without giving a specific time frame. Some analysts and
industry experts expect the test planes to fly in early
Duchesne said the engine incident would not defer deliveries
and that the CSeries was still on track to go to customers in
the second half of 2015, the current entry-into-service time
But with the planes grounded and only a modest number of
flying hours under its belt, speculation has increased that it
could be closer to the end of 2015, possibly early 2016.
(Reporting by Solarina Ho; Editing by Lisa Shumaker)