Bombardier Inc. (BBD/B)’s struggling CSeries jet, absent from the world’s biggest aviation expo after an engine blowout, got a vote of confidence from a U.K. lessor. The planemaker is still looking for orders.
“We would have liked to have an aircraft here, to display it and show it,” Bombardier Aerospace President Guy Hachey said yesterday in an interview ahead of today’s opening of the Farnborough International Airshow near London. “Unfortunately with the issue on the engine, we’re not able to come.”
A weekend announcement that Falko Regional Aircraft Ltd. signed two letters of intent to buy as many as 24 CSeries jets underscored Bombardier’s challenge at the Farnborough show. The letters aren’t firm orders, and flight trials for a model set to enter service in 2015 are on hold while Montreal-based Bombardier works to prevent a repeat of the May 29 engine fire.
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“We’ve now established what the fixes are,” said Hachey, who declined to elaborate. The failure occurred during a ground exercise on one of four planes in the CSeries test fleet.
United Technologies Corp. (UTX)’s Pratt & Whitney is working on “minor modifications to the engines and procedural changes” with the aim to restart test flights in the next few weeks, Pratt President Paul Adams said yesterday in an interview in London.
Bombardier’s 203 CSeries orders are short of the target of 300 for its commercial debut, raising questions about the jet that is the centerpiece of aerospace growth plans this decade at the maker of regional jets, business aircraft and turboprops. While Bombardier bills the CSeries as a challenger to Boeing Co. (BA) and Airbus Group NV (AIR) models, only one of the world’s 20 largest airlines by traffic has ordered the plane.
“We’ve brought some videos so the customers can see the aircraft being built and also flying,” Hachey said. “We’ve been keeping our customers very much abreast of what’s been going on, what the root cause is and how we’re going to fix it. If I take a longer-term view, we’re going to be fine.”
Bombardier’s plan for having the CSeries in service in 2015 remains intact, as is a goal of annual revenue from the program of $5 billion to $8 billion “once we’re at full capacity,” Hachey said.
The CSeries is designed to seat 108 to 160 people, produce less noise and cost about 15 percent less to operate than comparable planes. The jet is scheduled to be the first to use Pratt’s geared turbofan engine.
Falko is focusing on the smaller, CS100 variant of the CSeries, according to a statement released July 12. Neither Falko nor Bombardier gave a schedule for a firm order for the jets, whose $63 million list price would mean a sale with a maximum value of about $1.51 billion.
The accord handed Montreal-based Bombardier a rare public-relations victory after setbacks to the CSeries program, including multiple delays and rising costs. Bombardier said July 10 it expects to resume flight trials “in the next few weeks.”
“We are pleased to take the first step towards adding Bombardier’s state-of-the-art CS100 aircraft,” said Mark Hughes, executive vice president for corporate finance at Hatfield, England-based Falko.
Purchases by leasing companies are important, because they place planes with multiple customers. Russia’s Ilyushin Finance Co. has agreed to buy 32 of the planes, and Bombardier welcomed Falko’s interest.
“This is a lessor that understands the marketplace and understands what their customers want,” Rod Sheridan, Bombardier’s vice president of sales and asset management, said in an interview in Farnborough.
Falko was formed in 2011, according to a company statement. The lessor said it placed Bombardier regional jets with Mesa Airlines Inc. in the U.S. and Slovenia’s Adria Airways and also has acquired Q400 turboprops on lease to Croatia Airlines.
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