Bombardier CSeries Woes Grow as Engine Failure Halts Test

With the debut of its newest, biggest jet already running late, the last thing Bombardier Inc. (BBD/B) needed was another problem.

One arrived anyway after an engine on the CSeries caught fire during ground tests, adding to the setbacks for a model already plagued by delays and rising development costs.

The plane, Bombardier’s Flight Test Vehicle 1, also suffered damage on May 29 at the company’s facility in Mirabel, Quebec, said Marc Duchesne, a spokesman. Canada’s Transportation Safety Board is gathering evidence and will decide by June 2 whether to conduct a full investigation, according to Julie Leroux, a spokeswoman.

Any time lost in flight trials would extend the struggles for a plane that Bombardier envisions producing as much as $8 billion in annual revenue later this decade. Orders for the plane haven’t met Bombardier’s target, and few major airlines have embraced a jet that the company bills as a challenger to Boeing Co. and Airbus Group NV aircraft.

“This news is unlikely to help sentiment in the CSeries,” Robert Stallard, an analyst at RBC Capital Markets in New York, wrote yesterday in a note to clients. Stallard also said the incident may raise questions about the plane’s new engines, the geared turbofan model from United Technologies Corp. (UTX)’s Pratt & Whitney unit.

Photographer: Patrick Doyle/Bloomberg

The Bombardier Inc. CSeries 100 test airplane is unveiled at the company's production facility in Mirabel, Quebec, Canada, on March 7, 2013. Close

The Bombardier Inc. CSeries 100 test airplane is unveiled at the company's production... Read More

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Photographer: Patrick Doyle/Bloomberg

The Bombardier Inc. CSeries 100 test airplane is unveiled at the company's production facility in Mirabel, Quebec, Canada, on March 7, 2013.

“We hope the investigation will proceed quickly so that we can resume flight tests as soon as possible,” Duchesne said.

Pratt’s Role

Bombardier is being assisted in investigating the incident by Pratt & Whitney. More than 4,000 hours of engine testing have been conducted since trials began in September 2010, according to Bombardier’s website. The company has said the CSeries will cost about 15 percent less to operate and produce less noise.

The planemaker’s Class B stock dropped 2.4 percent to C$3.69 at the close in Toronto yesterday.

Bombardier’s biggest customer for the CSeries, Republic Airways Holdings Inc., said earlier this month that it’s considering whether to take the planes after a change in airline strategy.

“The whole point of ‘testing’ an aircraft is to find out if everything works perfectly -- and then fix it before it enters service,” Stallard said. “We’ve seen other testing issues in the past, but ultimately the issues have been addressed and the aircraft has entered operation. We expect this to be the case with the GTF.”

While rare, damaging engine failures during flight operations and ground trials do occur. In August 2010, a Rolls-Royce Holdings Plc Trent 1000 engine for the Boeing 787 Dreamliner suffered a blowout on a testbed in the U.K. Three months later, a Trent 900 model exploded on an Airbus A380 flown by Qantas Airways Ltd.

Flight Tests

In 2012, a Dreamliner doing high-speed taxi tests spewed debris from its General Electric Co. engine, igniting a grass fire along a runway at the Charleston, South Carolina, airport near Boeing’s new factory.

Bombardier is planning 2,400 hours of test flights for the CSeries. As of May 1, the company had logged about 280 hours of flight tests, or about 12 percent of the planned total. The FTV1 was the first CSeries prototype to fly, debuting on Sept. 16.

“It is unlikely in our view that the investigation period would create another delay for the CSeries program,” said Benoit Poirier, an analyst at Desjardins Securities.

The CSeries is now targeted for a commercial debut in the second half of 2015, following Bombardier’s Jan. 16 announcement that more time was needed to complete flight tests. The plane is designed to seat 108 to 160 people.

To contact the reporter on this story: Frederic Tomesco in Montreal at tomesco@bloomberg.net

To contact the editors responsible for this story: Ed Dufner at edufner@bloomberg.net Molly Schuetz, Stephen West

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