Bombardier Inc. delayed the maiden flight of its all-new CSeries jetliner for a second time, the latest setback in the Canadian planemaker's $3.4 billion bid to compete with bigger rivals.
Bombardier fell as much as 4.5 percent on the Toronto Stock Exchange after the company said it was pushing back its inaugural flight by up to a month.
"It certainly doesn't help alleviate any of the skepticism around management's assertion about program timing," said PI Financial Corp. analyst Chris Murray, calling the situation a bit of a disappointment.
Bombardier said the new schedule will give it time for additional software upgrades, with an inaugural flight now scheduled before the end of July. Its previous delay, late last year, was due to an unspecified supplier problem.
The CSeries, which can accommodate between 110 and 130 seats, is the first all-new, narrow-body plane in decades and is Bombardier's bet on the lucrative 100- to 149-seat segment. A reconfigured version of the plane can seat up to 160.
The delay comes only days after the Paris Air Show, which saw both splashy news from key rivals and a lack of new CSeries orders.
The maiden flight will cap the multi-billion dollar, five-year program that Bombardier hopes will position the company to compete against industry giants Boeing Co. and Airbus.
ENTRY INTO SERVICE BY 2014?
The latest delay highlights skepticism over whether the company can meet its ambitious target for the CSeries of entry into service a year from first flight.
The industry has been burned too many times by delays that have lasted years, like those that plagued Boeing's 787 Dreamliner and the Airbus 380.
"It's not, in the grand scheme of the program, terribly material. It's more of a reputation issue as opposed to a financial one," said Murray.
"So the bigger question is, when's the real entry-into-service date ... At this particular point, I've got limited expectations for deliveries of the CSeries in 2014. But we'll see," Murray said.
Bombardier shares, which have been volatile since last week's Paris Air Show, were down 10 Canadian cents at C$4.57 after touching a low of C$4.46.
The company has announced 177 firm CSeries orders so far and has repeatedly said it is confident it will reach its target of at least 300 firm orders by the time the plane enters into service.
Sales have been slow, however, with some airlines waiting for the first flight to see if the technology and efficiency claims are proven, industry analysts have said.
The CSeries is expected to have a 15 percent cash operating cost advantage, a 20 percent fuel burn advantage and will be significantly quieter, the company says.
Bombardier said on Wednesday it was in the final stages of testing before the first flight. These tests include power runs, and low and high speed taxiing. Ground vibration tests and software upgrades have been completed and the company has submitted a flight test permit to Transport Canada.
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