Bombardier CSeries jet delayed by at least nine months
By Solarina Ho
TORONTO (Reuters) - Bombardier Inc (BBDb.TO: Quote) warned on Thursday it will delay putting its new CSeries jet into commercial service until the second half of 2015, a potentially costly setback in its plans to challenge Airbus Group NV (AIR.PA: Quote) and Boeing Co (BA.N: Quote).
Bombardier said the delay is necessary so that it can undertake a longer-than-expected test phase to ensure overall systems and software on the narrow body aircraft are mature.
The news sent the shares of the Montreal-based planemaker down more than 8 percent at one point to their lowest level since early May.
The delay is the latest setback for the world's fourth largest planemaker's ambitious plan to dominate the growing 100- to 149-seat market. In that category, it is pitting the CSeries against the smaller aircraft made by industry giants Boeing and Airbus.
The highly anticipated, completely new CSeries is built using lightweight composite materials and other technologies designed to make the jet burn much less fuel, be significantly quieter, and have sharply lower operating costs for airlines.
The plane's development costs now stand at around $3.9 billion, but analysts warned the delay could drive that figure up significantly.
"Management hasn't hit any of their major important milestones, so they have a credibility issue right now," said Scott Rattee of Stonecap Securities. "You'd hate to think we're going to get into November 2015 and then have another delay."
Bombardier declined to comment on the financial impact but said it was still "aiming for" C$3.9 billion. The company might offer more details when it reports fourth-quarter and full-year results on February 13. Continued...