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More on the CSeries milestone

Sept. 17, 2013, Montreal - With the maiden flight of the C Series, Bombardier Inc. has officially ascended into commercial airspace ferociously guarded by industry giants Airbus SAS and Boeing Co.


September 17, 2013
By The Globe and Mail

About 2,700 employees and 300 Bombardier guests cheered loudly as the
plane took off from a Mirabel runway for a two-and-a-half-hour flight
over the Lower Laurentians. It ascended to 12,500 feet and reached a
speed of 230 knots (425 kph). “Everything went very well,” said
Bombardier chief test pilot Chuck Ellis, though one aircraft subsystem
he didn’t identify sent out an advisory message he described as “minor.”

Bombardier, however, said the cost of the C Series has climbed by
$500 million, highlighting the risks of the program. Still, the C
Series’s first flight is a milestone for Bombardier that has been a
decade in the making. While Canada has produced a number of regional
jets in the past, the country has never designed and built a commercial
airliner on this scale, a plane with an extended range that seats over
100 passengers.

 

“This is a new chapter in our history,” said
Pierre Beaudoin, president and CEO of Bombardier, shortly before the
first prototype took off.

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Bombardier clients, entertained in the
Charlevoix region over the weekend and bused to the Mirabel plant, were
impressed. “If you were looking the other way when it took off, you
would have missed it: It was that quiet,” said Robert Deluce, president
and CEO of Porter Airlines, who wants the airline to fly the C Series at
Toronto’s Billy Bishop airport, though it’s unclear if the city will
approve it.

“It is a great feeling to see something you have
worked on move from paper to reality,” said Nico

 

Buchholz, executive
vice-president, fleet management, at Lufthansa, the first airline to
order the C Series, for its Swiss International affiliate.

 

Proving
that the C Series can fly is one thing. Selling the aircraft, producing
it on budget and delivering it on time is another matter, and risks
abound.

 

Extensive flight testing is required to prove the C Series
can deliver on advertised advantages, and help win firm orders.
Bombardier says the single-aisle plane will burn 20 per cent less fuel
and will cost 15 per cent less to operate than competing planes.

 

Bombardier
so far has 177 C Series on firm order, which analysts view as a slow
start, but expects to have sold 300 airliners by the time the plane
enters into service. David Tyerman, managing director, transportation
and industrial products, at Canaccord Genuity, expects orders will
trickle in over the coming months as the flight test data substantiates
Bombardier’s claims on operational performance.

 

Bombardier
commercial president Mike Arcamone said the cost of the C Series has
reached $3.9 billion (U.S.) – $500 million more than planned. “Our
target has always been to stay below $4-billion,” he said.

 

Later, a
Bombardier official acknowledged that $3.9 billion was the most
up-to-date figure, but said the

hike is explained by a change in
accounting rules, not by unforeseen expenses.

 

The timing of the
plane’s entry into service is also uncertain. Bombardier thinks it will
be able to deliver its first C Series after it completes 2,400 hours of
flight tests over 12 months. “It is an aggressive flight testing
program,” acknowledged Guy Hachey, president of Bombardier Aerospace.

 

“Given
they missed a number of deadlines, we think it is inevitable that
testing will take longer,” said Cameron Doerksen, analyst at National
Bank Financial. He and most analysts believe that the first delivery of
the plane will slip into 2015. Even Mr. Beaudoin appeared to agree when
he let drop that the testing program would last “a year and a half.”

 

But
as Bombardier encroaches on the lower end of Airbus’s and Boeing’s
domain, the two aerospace giants are not watching idly. They upgraded
their legacy airframes with new fuel-efficient engines. The A320Neo and
the 737Max upgraded families are scheduled to arrive later in the
decade.

 

Both Airbus and Boeing are also using their financial
might to discount the sales of their planes and to undercut Bombardier.
“For the C Series, that’s the biggest threat,” said Mr. Doerksen.

 

Bombardier
predicts that sales of the C Series will almost double its aerospace
turnover within five years with an additional $5-billion to $8-billion
in revenue, annually. Bombardier estimates airlines will buy 6,900
planes with a 100- to 150-seating capacity over the next 20 years, and
its hopes to capture half of that market.