Bombardier's all-new CSeries makes inaugural flight
By Solarina Ho, Alwyn Scott and Tim Hepher
MIRABEL, Quebec (Reuters) - Bombardier Inc (BBDb.TO: Quote) successfully flew its CSeries jetliner for the first time on Monday, kicking off a renewed effort to sell the all-new narrow-body plane, but raising questions about its development cost.
The first flight of the CS100, a key milestone in creating the first new commercial jet of its size in decades, also revealed at least one technical problem.
At a press conference, Bombardier said an alert had gone off for one of the subsystems during the flight, without providing details. The "advisory message," however, did not affect the airplane and would not have required the pilot to land even if the plane had commercial passengers aboard, chief test pilot Chuck Ellis said.
Bombardier Commercial Aircraft President Michele Arcamone clouded the cost estimate for the program by saying at the press conference that the total was about $3.9 billion, about $500 million more than the official estimate.
After the press conference he told reporters that $3.4 billion remained the official estimate, and that estimates fluctuate due to suppliers, materials and other factors.
Later Marc Duchesne, public affairs director at Bombardier Commercial Aircraft, said the higher total mentioned by Arcamone during the press conference included $500 million in interest expense, required under International Financial Reporting System accounting rules, and was not due to program cost increases.
Steve Hansen, an analyst with Raymond James in Vancouver, British Columbia, said the higher cost estimate did not alter his neutral view on Bombardier stock, which closed down 0.6 percent at C$4.96 on the Toronto Stock Exchange.
"Our only residual concern is some of the timeline concerns around the flight testing and the entry-into-service date," he said, speculating that the program could incur some additional costs because of delays. Continued...