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Cost questions arise after 1st flight of Bombardier CSeries
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Bombardier Inc successfully flew its CSeries jetliner for the first time on Monday, kicking off a renewed effort to sell the all-new narrow-body plane, but raising questions about its development cost.
The first flight of the CS100, a key milestone in creating the first new commercial jet of its size in decades, also revealed at least one technical problem.
At a press conference, Bombardier said an alert had gone off for one of the subsystems during the flight, without providing details. The “advisory message,” however, did not affect the airplane and would not have required the pilot to land even if the plane had commercial passengers aboard, chief test pilot Chuck Ellis said.
Bombardier Commercial Aircraft President Michele Arcamone clouded the cost estimate for the program by saying at the press conference that the total was about US$3.9 billion, about US$500 million more than the official estimate.
After the press conference he told reporters that US$3.4 billion remained the official estimate, and that estimates fluctuate due to suppliers, materials and other factors.
Later Marc Duchesne, public affairs director at the aircraft maker, said the higher total mentioned by Arcamone during the press conference included US$500 million in interest expense, required under International Financial Reporting System accounting rules, and was not due to program cost increases.
Steve Hansen, an analyst with Raymond James in Vancouver, said the higher cost estimate did not alter his neutral view on Bombardier stock.
“Our only residual concern is some of the timeline concerns around the flight testing and the entry-into-service date,” he said, speculating that the program could incur some additional costs because of delays.
The new jet faces an ambitious, 12-month deadline to enter commercial service, and tough sales competition from bigger rivals Airbus and Boeing.
The CS100 test aircraft gently touched down in clear, chilly weather beside the Bombardier plant in Mirabel, Quebec.
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