C Series Jet Engine Problem

By Monday, June 2, 2014 0 No tags Permalink 0

Bombardier’s C Series hit by new setback as engine fails reads the print and online Globe and Mail story from May 31, 2014. The C Series is Porter Airlines jet of choice for Toronto’s waterfront once the port authority secures approval from Toronto City Council.

The jet’s manufacturer, Bombardier, wouldn’t say what form the failure took. The article indicates Bombardier didn’t say if it was due to a fire or not.

The Transportation Safety Board is investigating.

The event involved Bombardier’s aircraft Flight Test Vehicle 1, the same model that Porter has targeted for use at the island airport. Bombardier claimed that the incident was not abnormal since flight testing is designed to push the aircraft to its limits. In this case, the failure happened while the plane was on the ground.

The crew and Mirabel Airport’s emergency unit were able to contain the problem and no one was injured.

The National Post reported that, “The C Series was originally slated to enter into service in late 2013”. Then the first flight of the aircraft was delayed nine months. In January this year, Bombardier Inc. announced it wouldn’t be able to deliver the plane in 2014 but moved the date to the second half of 2015. The company still claims, after this latest incident, that it doesn’t anticipate yet another delay.

Additional information may be found on the CTV News website


For investors, below is Business News Network’s account of how the incident may effect Bombardier’s share price.


“Bombardier Inc.’s behind-schedule C Series new-jet program faces possible further delays and ballooning costs given how little has been done so far in the flight-test phase, says one analyst.

The C Series’ revised 22-to-23-month flight-test plan is similar to the 21 months Boeing Co. (BA.N 135.25 0.11 0.08%) took to certify its 787 but “actual progress through the first four months of C Series flight-testing is well behind Boeing’s early pace on 787,” UBS Securities analyst Darryl Genovesi says in a research report published Monday.

Montreal-based Bombardier will likely burn through cash at $1.48 billion US in 2014 and $1 billion next year, $1 billion worse than the combined 2014-2015 outflow previously modeled at UBS, he said.

The anticipated increase is mainly due to an extra $500 million cost in C Series development and $400-million in inventory build to support the production ramp-up, said Genovesi.

Free cash flow break-even in 2016 is possible, but “we think cash likely remains negative for longer if C Series schedule slips again.”

Bombardier is betting big on the success of the C Series and new business jets, but has experienced several delays on both the C Series and some business-jet programs.

The aerospace giant said on Jan. 16 it is once again delaying the aircraft’s entry into service, until late next year instead of fall 2014 due to adjustments in flight testing.

Bombardier president and chief executive officer Pierre Beaudoin said in Davos last week at the World Economic Forum that the company won’t need to raise additional funding this year after delaying the C Series for a fourth time.

The cost of the C Series development program is now pegged at about $3.9 billion.

Also last week, Bombardier Aerospace said it is slashing 1,700 jobs as part of a cost-containment program, but said the cuts are not directly related to any one program.

UBS analyst Genovesi also said in his report that he continues to anticipate that Bombardier will push out or retract its 2014 targets for a $500 million development spending decline and 8-per-cent margins at both its aerospace and rail divisions.

The decline in the value of the Canadian dollar will provide Bombardier Aerospace with some breathing room, “but we still think it’s unlikely that [Bombardier] can get to 8 percent in 2014 without a sharp bizjet market recovery.”

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