Bombardier CSeries engine failure was in low-pressure turbine-UBS

Fri Jun 6, 2014 1:08pm EDT
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TORONTO, June 6 (Reuters) - Canada's Bombardier Inc said that the engine failure on its CSeries test plane last week occurred in the low-pressure turbine and that the airframe on the jet had been damaged, according to a UBS research note.

Bombardier downplayed the impact of the engine failure to the test schedule of the $4.4 billion jetliner program, UBS said, and shares, which fell after the incident last week, rose nearly 2 percent on Friday to C$3.80.

"While root cause analysis is ongoing, Bombardier emphasized that the failure was unrelated to the gearbox, and also suggested that a manufacturing defect, rather than a design flaw, may have been the cause," UBS analyst, Darryl Genovesi, wrote in a client note late on Thursday.

He cited meetings with Bombardier Chief Executive Pierre Beaudoin and senior investor relations director Shirley Chenier.

A Bombardier spokesman could not immediately confirm the UBS report.

The May 29 engine failure initially sparked fears of further delays for Bombardier's CSeries program, already 18 to 24 months behind schedule, and sent Bombardier's shares down 3.7 percent last Friday. The plane is due to enter service in the second half of next year.

The UBS report supports comments made on Thursday by Pratt & Whitney parent United Technologies Corp Chief Financial Officer Greg Hayes. He said the failure did not relate to the engine's signature gearing system, known as the Geared Turbofan.

A problem with the gearbox would have had broader repercussions as it is a component being used not only on the CSeries but other aircraft such as Airbus' forthcoming A320neo.

Asked about the low-pressure turbine, located at the rear of the engine, Pratt & Whitney spokesman Jay DeFrank declined on Friday to elaborate on the technical details of the incident, beyond confirming that the gear system was not involved.

In his report, Genovesi said the engine that failed "was known to have problems" and that Bombardier had considered sending it back to Pratt, but instead repaired it at its own facilities.

The failure, which took place during stationary maintenance testing, occurred after the repairs, UBS said, adding that a root cause was expected by the end of the week. (Reporting by Solarina Ho in Toronto, additional reporting by Lewis Krauskopf in New York; editing by Andrew Hay)