UPDATE 2-Bombardier CSeries flight testing halted after engine problem

Fri May 30, 2014 5:38pm EDT
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(Adds analyst's comment, reaction from Pratt, context on engines and competition)

By Allison Martell and Lewis Krauskopf

TORONTO May 30 (Reuters) - Bombardier Inc's new CSeries jetliner suffered an "engine-related incident" during stationary maintenance testing on Thursday, prompting a halt to flight tests and dealing another blow to the plane maker's effort to compete with Boeing and Airbus in the narrow-body market.

Bombardier said on Friday it was investigating the incident with Canadian authorities and engine maker Pratt & Whitney, a unit of United Technologies Corp.

Bombardier's shares closed down 2.4 percent at C$3.69 on the Toronto Stock Exchange.

Pratt spokeswoman Sara Banda said it was too early to say whether the incident could affect the broader development program for the engine, known as a geared turbofan (GTF), which offers better fuel efficiency than previous models.

But she said Pratt still expects to meet or exceed all its commitments related to the GTF program.

A similar Pratt engine will power the rival Airbus A320neo, but the risk of the CSeries test failure affecting the Airbus timetable is remote, said Richard Aboulafia, an aerospace analyst at the Teal Group, in Fairfax, Virginia.

"Given all the testing the engine has been through, the incident is likely to be pretty minor," Aboulafia said.   Continued...