Bombardier Inc. will have to find another CSeries jet buyer to become the plane’s first operator after Sweden’s Braathens Aviation AB said it’s seeking changes to its delivery schedule.
Braathens agreed in 2011 to order 10 of Bombardier’s CSeries jets in a pact valued at $665 million, based on list prices. The accord also contained options for a further 10 aircraft, boosting its potential value to about $1.37 billion, Bombardier said at the time. Bombardier didn’t disclose a timeline for the deliveries when it announced the deal.
“We have informed Bombardier that we will not assume the role of formal launch operator of the aircraft type,” Braathens, based in the Stockholm borough of Bromma, said Friday in a quarterly report posted online. “Due to increased uncertainty we are discussing other possible changes to the aircraft delivery schedule with Bombardier.”
Marc Duchesne, a Bombardier spokesman, didn’t immediately return a call today seeking comment.
Malmo Aviation, the domestic unit of Braathens, was scheduled to receive the first CSeries jets in July or August of next year, Konark Gupta, an analyst at Macquarie Capital Markets in Toronto, said today in an interview.
Montreal-based Bombardier halted test flights of the CSeries, its biggest ever plane, after a Pratt & Whitney engine failed during a May 29 ground trial in Mirabel, Quebec. Bombardier has repeatedly said it expects flight testing to resume “in the coming weeks.”
CS100 Jet
Bombardier has twice pushed back its timeline to have the plane in service, having run late in starting test flights. The May 29 incident “may cause another delay to the CSeries introduction,” Braathens said Friday without elaborating.
Bombardier has most recently pledged to have the smaller of two CSeries versions, the CS100, enter service in the second half of 2015, with the larger CS300 following suit six months later. Chief Executive Officer Pierre Beaudoin reaffirmed the target in July.
A three-to-four-month halt to flight testing, “assuming the program resumes next month, will probably push entry into service toward the end of 2015,” Gupta said.
“Thus, we think management is less likely to announce a new entry into service target” because the deadline was “wide enough to absorb a 3-4 month delay,” he said.
Gupta rates the shares outperform, the equivalent of a buy.
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