Bombardier’s C Series delivery pushed back to 2016

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Bombardier Inc. says the delivery date of its C Series airliner will be pushed back to 2016 after warning last month such a delay was possible because it doesn't control the process.The shares fell 0.4 per cent to $2.50 in trading on the Toronto Stock Exchange.

The company remains on track to win certification for the plane by the end of this year, chief executive officer Alain Bellemare told reporters Friday after a special shareholder meeting in Montreal. That will then set things in motion for the plane's delivery afterward to its first customer, which remains unnamed.

"The notion of entry into service is more in the hands of the customers," Bombardier spokeswoman Isabelle Rondeau said by phone. "But certification is still for what we planned, which is second half of 2015."

Though Bombardier had been insisting last year that the new airplane would enter into service some time in the second half of 2015, executives with the company have backed away from that commitment more recently.

At a special event last month to mark the first flight of the larger CS300 C Series model, Mr. Bellemare said delivery could slip to 2016 because it depends on certain things the first customer has to do like make sure employees are trained to handle the aircraft.

"We're in a zone," Mr. Bellemare said at the Feb. 27 event. "We're not talking about one year later. We're talking about maybe a few weeks. That will be a function of the needs and the abilities of the client."

The C Series is Bombardier's big bet to drive revenue in the commercial aircraft market over the next generation. The aircraft will compete against the smallest planes made by Airbus and Boeing, a tough prospect given the rivals can offer significant discounts spread over their much-larger order books.

Bombardier has completed roughly 80 per cent of the testing it considers "high risk" on the aircraft. Firm orders for the plane stand at 243 of the 300 the company wants by the time the first unit gets delivered. The program cost has soared to an estimated $5.4-billion, about $2-billion over its original budget.

"While certification and/or entry into service might slip into the first quarter of 2016, we would consider that immaterial," RBC Dominion Securities Inc. analyst Walter Spracklin said in a March 25 note. "The real risk that we are monitoring for is a testing issue that would delay the program more than six months."

Mr. Bellemare's comments came as Bombardier won approval Friday from its shareholders for a special $1.1-billion equity sale to fund its aircraft development programs. Bombardier was not authorized under its bylaws to issue as many shares as it wanted to, so it had to seek special consent from its investors. Proceeds from the public offering were held in escrow until the vote earlier Friday.

Bombardier is controlled by the Beaudoin-Bombardier family, who hold supervoting shares. Questioned repeatedly if they plan to cede the dual class share structure, members of the family have always countered that the structure benefits the company in tough times.