By Jon Ostrower
MIRABEL, Quebec-- Bombardier Inc., in a step toward rebuilding
industry confidence under its new chief executive, completed the
first flight of a jet that it hopes will anchor its future as a
commercial aircraft manufacturer.
Alain Bellemare, who took the helm two weeks ago, said the
company's flagship CSeries jetliner remains on track for
certification in the later part of 2015, sticking to its current
schedule. That jet, the CS300, flew for the first time here on
Friday.
The flight of the 135 to 160 seat single-aisle jet, Mr.
Bellemare said, marked "an inflection point" in the CSeries'
development, which has been plagued by delays, technical issues and
cost overruns. The first of two CSeries models initially was to be
delivered to airlines in late 2013.
Bombardier's problems with the CSeries program unfolded as the
Montreal-based company also sought to develop other aircraft,
including the now-halted Learjet 85 business jet. The delayed
CSeries and a $1.4 billion write down related to Learjet strained
the company's cash position and weighed on its share price, and in
February, Pierre Beaudoin, a member of the family that controls the
plane and train maker, stepped aside as CEO to become executive
chairman.
On Friday, the company said it had raised $868 million from an
equity offering, above the $600 million first targeted. A
previously disclosed debt issue also launched on Friday raised
$2.25 billion, Bombardier said, more than its $1.5 billion target,
according to people familiar with the matter.
With more than 1,000 hours flight testing of the single-aisle
CS100 and CS300, Bombardier executives are growing increasingly
confident in the CSeries aircraft, saying it will hit its target of
a 20% improvement in fuel efficiency over today's jets.
However, the company has a challenging production ramp up ahead
as it tries to accelerate sales and demonstrate it hasn't been
sidelined by larger rivals Boeing Co. and Airbus Group NV, which
have offered it little room to secure new buyers on its turf.
The CS300, the up to 160 passenger version of two models being
developed, competes with the smallest jets from Boeing and Airbus.
That jet accounts for roughly two-thirds of Bombardier's 243 orders
for the pair.
Swiss International Air Lines, which became in 2008 the first
carrier to place orders for the CSSeries, dispatched a senior
executive to Mirabel for Friday's flight, but declined to say if it
was the carrier in talks to be the launch operator. Its chief
technical officer, Peter Wojahn, said the carrier was "not assuming
we're going to be the launch [operator]."
Mr. Wojahn said the unit of Deutsche Lufthansa AG expects to
receive its first jets in 2016.
Two earlier airlines declined the role of first operator,
leaving Bombardier to seek a new lead customer.
Bombardier backtracked on Friday from a statement it made from
months ago claiming to have secured a launch operator for the
CSeries. Negotiations with the undisclosed airline are at an
advanced stage but are "not done, done," CSeries program vice
president Rob Dewar said, adding that the company expects the
undisclosed airline that it has held discussions with will be the
jet's first operator.
The confusion around the jet's first operator comes as
Bombardier hopes to rebuild industry confidence shaken by extended
the jetliner's delays and technical issues.
The company has faced fierce competition from the jetliner
duopoly, which has responded by putting new engines on its existing
aircraft, rather that develop expensive all new jets. Boeing and
Airbus have accumulated more than 6,000 orders for its updated
jets.
Separately Friday, Airbus said that it would advance its
single-aisle production rate to 50 jets a month in 2017, surpassing
a move by Boeing to advance its production to 47 a month of its own
single-aisle jets that same year. Boeing plans to push output to 52
a month by 2018.
The increased output, with more than 100 single-aisle jets
coming off the European and U.S. plane maker's assembly lines,
would require both to deliver the equivalent to Bombardier's
current order backlog in just 2 1/2 months. Mike Arcamone,
president of Bombardier's commercial aircraft unit, said it is
nearly sold out in 2016 and has a limited number of its planes
available in the second half of 2017.
Ben Dummett contributed to this article.
Write to Jon Ostrower at jon.ostrower@wsj.com
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