The Bombardier CSeries is almost ready to fly. A six-week battery of critical software tests that began in late March revealed no show-stoppers. The machinists in the company's final assembly plant outside Montreal handed over the first CS100 to the flight test team by mid-May. First flight still remains on track for late June - just as Bombardier promised when the milestone event was delayed by six months last November.
"We are resolutely focused on holding the inaugural flight of the CS100 by the end of June," says Bombardier chief executive Pierre Beaudoin.
In the interim, the CSeries made progress on several fronts. While unveiling the first CS100 to the public on 7 March, Bombardier revealed a redesign for the CS300 that raises the standard seat-count to 135 and up to 160 seats in a high-density lay-out, broadening the small naarowbody's appeal to the growing ranks of low cost carriers.
Investors seem more confident about the programme. Bombardier's shares are trading about 50% higher than when the delay was announced six months ago.
"From a product development perspective it looks like it's going actually pretty well," says Ronald Epstein, an aerospace and defence analyst at Merrill Lynch.
The CSeries introduces several new technologies for Bombardier. The six-month delay revealed some internal issues, but none has emerged yet as a clear red flag. Indeed, Pratt & Whitney certificated the PW1500G engine with Transport Canada in February, the first such milestone in its new product line of PurePower geared turbofans. Shenyang Aircraft Corp. (SAC) is still unable to deliver the entire fuselage, but Bombardier has developed a work-around while its Chinese supplier builds its skills by delivering the rear section.
The fly-by-wire supplier, Parker Aerospace, faced the most critical period of testing over the last two months. Bombardier is seeking to avoid a repeat of the fly-by-wire problems that only a few years ago grounded the CRJ1000 shortly after it began flight test for nearly a year. As a result, the company has invested in an elaborate testing infrastructure on the ground in Mirabel that is precisely aimed at detecting any major technical surprises before the flight test phase begins.
Bombardier has a ground-based simulator called the integrated systems test and certification rig. It tests how the software interacts with the flight controls in an integrated environment on the ground.
"I think the CSeries flight test will behave differently than what we have observed before," Beaudoin says. "We are far more advanced at understanding the systems and having tested the systems."
The software that manages the fly-by-wire control surfaces and the other systems entered the critical round of safety of flight testing in late March. At the time, Bombardier Aerospace CEO Guy Hachey described the tests as the most closely watched aspect within the programme. It would take six to eight weeks before the company would know if they yielded any new - and undoubtedly unwelcome - surprises.
In public meetings with shareholders and analysts on 9 May, Bombardier officials passed on opportunities to discuss details of the software test results. But both Beaudoin and Hachey also made it clear that the CSeries first flight remained on track for first flight by late June.
"They said as recently as their last earnings call that they will fly in June," Epstein says. "We'll see. They probably will or they wouldn't have said it."
In a 10 May research note, RBC Capital Markets analyst Walter Spracklin agreed that the comments by Bombardier executives provided a "key lift" for the CSeries programme in the minds of investors.
"We expect this confirmation will provide for a nice boost in sentiment in the near term," Spracklin wrote.
Any positive feelings for the CSeries are clouded by a question that has hovered over the programme for two years.
Epstein summarised the source of the concerns: "So why [are there] not orders?"
Bombardier's technical progress on the CSeries over the last two years has not been matched by a sharp increase in firm orders from customers.
Nearly all of the 145 firm orders in the backlog as of late May were signed over a three-year period from March 2009 to July 2011. Only two firm orders for a total of 15 aircraft have been signed during the last two years. The order book actually declined by three aircraft in the first quarter after an undisclosed customer cancelled a deal signed at the last Paris airshow.
Meanwhile, Bombardier has been unable to convert four commitments into firm orders for a total of 69 more aircraft. The commitments include conditional orders by Porter Airlines for 12 CS100s, Ilyushin Finance for 32 CS300s and by an undisclosed customer for five CS100s and 10 CS300s. Turkish carrier Atlasjet also has signed a letter of interest for 10 CS300s.
Bombardier executives contend that the trickle of new firm orders is not abnormal for an all-new aircraft. Comparisons to the re-engined Airbus and Boeing narrowbodies are misleading and unfair, Bombardier says, as they are derived from mature programmes. Airbus and Boeing have added more than 3,000 firm orders to their single-aisle backlogs over the past two years. Bombardier's goal is to roughly double the existing orders for the CSeries to 300 aircraft for 20 airlines by the time the CS100 enters service.
But analysts have been more critical of Bombardier's sales record on the Cseries so far. The only debate is not over whether the aircraft should have more customers by now, but on why Bombardier's sales tactics have not achieved more success. Indeed, most industry analysts now agree that the CSeries performance promises are impressive, at least on paper.
Teal Group analyst Richard Aboulafia has questioned Bombardier's ability to compete on pricing and other key terms against Airbus and Boeing, especially on financing options, residual value guarantees and up-front discounts. Aboulafia's criticism echoes statements made last year by Air Lease Corp chief executive and Embraer customer Steven Udvar-Hazy, who said that Bombardier is asking too much money for the value that the CSeries offers.
Epstein, however, is not so sure that Bombardier prices the CSeries too high in the market.
"You hear stories that they don't want to be all that aggressive on price. I don't know that for a fact. That might be part of it, that might not," Epstein says.
The CSeries remains in competition for a variety of large orders. Since 2009, Qatar Airways has expressed interest in launching the CSeries into service with an order for as many as 100 aircraft, but the carrier has said it wants to wait until after flight testing begins before it completes its evaluation. EasyJet confirmed on 15 May that the CS300 is still a contender for a similarly-sized order, but as a competitor to the 737 Max and A320neo.
By choosing the 110-160 seat segment for the CSeries, Bombardier adopted a risky strategy to compete against Airbus and Boeing. The CSeries, however, was launched in 2008 when it appeared that both manufacturers intended to launch an all-new narrowbody aircraft aimed at the segment above 150 seats. Instead, the world's two largest airframers decided to re-engine the existing narrowbodies, which include models that compete directly with the CSeries. On the other end of the market, Embraer has established a strong niche in the segment between 70-120 seats.
"They're just kind of sandwiched between them," Epstein says. "So I think that's part of it."
Another issue that may be holding airlines back is Bombardier's lack of experience in this market segment, he says. The CSeries is the largest and most sophisticated aircraft that Bombardier has built, and some airlines may worry about facing teething issues until the aircraft matures.
"There's a lot of uncertainty around entry into service and product development and that sort of thing," he says. "As an airline, why would you want to take that risk unless you were highly incentivised from an economic point of view?"