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Supplier issues ground Bombardier C Series jet's release

A mock-up of the new C-series passenger jet from Bombardier in this file photo.

John Morstad/The Globe and Mail

Bombardier Inc. has announced a six-month delay for the maiden flight of its C Series jet, a setback for the company's $3.4-billion effort to vault into the large commercial airliner market.

Montreal-based Bombardier said Wednesday that the 100-seat C Series will take its inaugural flight at the end of June of next year, rather than next month, and will begin regular commercial flights about a year later.

President and chief executive officer Pierre Beaudoin cited challenges for certain suppliers to deliver components on time, which will have a knock-on effect on the sequence of parts arriving at the assembly facility.

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A timely rollout of the C Series is important for Bombardier as it battles the global giants of the aircraft industry. Now Bombardier must prove to prospective customers that the delay is just a blip in production and not a sign of deeper problems with the program. While a short delay was widely expected, some analysts say a six-month delay could hurt the planemaker's reputation and possibly put off orders as airlines take a wait-and-see stance.

"We don't think the delivery delay will lead to order cancellations, but it seems unlikely that Bombardier will generate any C Series orders before there is more certainty on the development timeline," said National Bank Financial analyst Cameron Doerksen in a research note.

"Bombardier's credibility will take a hit and we believe that the market will be skeptical of the schedule until the plane actually flies," he said, adding, however, that he doesn't think the C Series program will be hurt in the long run.

Indeed, some customers said they're glad Bombardier's priority is to ensure C Series is built properly, not quickly. Bryan Bedford, president of Republic Airways Holdings Corp., the largest customer for the C Series with an order for 40 of the larger CS300 version and another 40 options, said he is not surprised by the delay given the technical challenges faced in developing an entirely new aircraft.

"We were pleased to see Bombardier Aerospace accept the delay rather than cut corners to meet an arbitrary and self-imposed deadline," Mr. Bedford said. "As an operator it is more important to get the product design and reliability right up front rather than get it fast."

So far, Bombardier has booked 138 firm orders and options to purchase another 214 C Series planes. The timeline for the larger version of the aircraft remains unchanged, with entry into service scheduled for the end of 2014, Bombardier said.

Bombardier's announcement was made as the company reported a third-quarter increase in profit to $212-million (U.S.) or 12 cents per share, from $192-million or 11 cents in the year-earlier period. Revenues slipped to $4.3-billion from $4.6-billion.

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The company, which will be competing with Boeing Co. and Airbus SAS with the C Series, follows the two aerospace giants in failing to meet key program milestones. Boeing's 787 Dreamliner launched more than three years later than promised and the Airbus A380 jumbo jet came in almost three years behind schedule.

"History tells us that most large projects are subject to slippage," Zafar Khan, an analyst with Société Générale in London, said in an e-mail.

"The big challenge for Bombardier management now will be to try to deliver on this revised schedule and not to suffer the fate of Airbus on the A380 or that of Boeing on the 787. The company is introducing a lot of new technologies into the C Series and, of course, it has a brand new engine so a lot of things have to come together correctly in the next six to eight months, including the challenge of integrating the 'fly by wire' [fully electronic control] system." However, Mr. Khan believes interested customers aren't likely to be put off by the delay.

A lack of aggressive marketing by Bombardier is the "obvious culprit" for modest sales so far of the C Series compared with planes with new engines being offered by Boeing Co. and Airbus SAS, said Richard Aboulafia, vice-president of analysis for Teal Group Corp., an aerospace consulting firm based in Fairfax, Va.

"This is a plane that's well designed [with] some very strong features," he said. But to energize sales, Bombardier should offer discounts, its own leasing program for the plane and what he called walkaway rights that would enable airlines to return the planes if they're not happy with the performance.

"There's still time. Any time they want to get serious, that would be good."

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