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Bombardier Inc. is asking a lot of patience from investors and customers on the company's $3.4-billion-and-still-flightless C Series commercial aircraft venture. It's a bit much to ask them to stop thinking, too.
The Quebec-based transportation manufacturer's news release Wednesday, announcing another delay in the C Series' first flight – the third in seven months – could have been written by George Orwell. The aircraft's auxiliary power unit and its engines are integrating smoothly! The latest software upgrades have been completed! The Commercial Aircraft division's president, Mike Arcamone, found it "thrilling" to see the C Series power up on the tarmac for the first time! Oh, yeah, and the plane won't fly by the end of the month, as Bombardier had promised less than a month ago. The "highly technical last steps" are taking longer than "initially anticipated." Now it says the first flight will take place "in the coming weeks."
Investors deserve better than this attempt to spin the release as a largely good-news, everything-is-fine-here update. The bottom line is that Bombardier has now promised three times to have the C Series in the air by a certain date, and has thrice failed. Instead of providing the market with frank detail and firm assurances, the company hid behind sugar-coating and vagueness. They're not going to win any awards for investor communication here, or for management credibility.
The new fuzziness of the timetable might simply be late-in-the-game prudence – when you've missed three self-imposed deadlines, maybe it's smart not to set another one. And after all, delays aren't uncommon when developing a new-technology aircraft from the ground up. But in the wake of Boeing's infamous three-year delay in its Dreamliner, the airline industry has become suspicious about repeated schedule revisions – especially open-ended ones. How many weeks are "the coming weeks"? Two? Six? 20?
The first flight isn't the only thing about the C Series that's taking longer than expected. Bombardier so far has 177 firm orders for the jet – less than 60 per cent of its target of 300 planes by the middle of next year. After a flurry of customer interest in 2009-2011, the company booked only two new customers last year, and just one so far this year (a 32-plane commitment from Russian leasing company Ilyushin Finance Co. in June). Given that this is a brand new aircraft with unproven technology – and what's more, one that has made bold promises about fuel efficiency and operating cost savings – each successive delay is making potential buyers more insistent on seeing evidence of test-flight success before they're going to budge.
Meanwhile, the company's window of opportunity is narrowing before its much bigger competitors Airbus and Boeing can come out with their own upgraded planes in the 110-to-149-seat market, which will appeal to existing customers and will come with well-established proven technology. As the delays drag on, the risk that those firm orders will fall short of the company's target – and the investment community's expectations – becomes more real.
With a $3.4-billion investment at stake, the company is going to have to do better than delays and PR spin. They can either give the market clearer information, or better yet, get the C Series in the air.
David Parkinson is a contributor to ROB Insight, the business commentary service available to Globe Unlimited subscribers. Click here for more of his Insights, and follow him on Twitter at @parkinsonglobe .
David Parkinson