New Bombardier Jet Suffers Major Engine Failure -- 3rd Update

By Dow Jones Business News, 
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By Jon Ostrower

A Bombardier Inc. CSeries test aircraft suffered a major failure of one of its two engines during a ground test Thursday, halting flight trials of a new commercial jet that aims to challenge the dominance of Boeing Co. and Airbus Group NV.

The unknown problem that caused the failure on the new PW1500G engine, developed by the Pratt & Whitney unit of United Technologies Corp., could have knock-on consequences for other plane makers, which have ordered more than 5,500 of the engine type for new aircraft. Those companies include including Airbus, Embraer SA and Mitsubishi Aircraft and others.

Pratt is competing head-to-head with General Electric Co. in developing new, quieter and more fuel-efficient engines for the multitrillion-dollar single-aisle jetliner market.

Bombardier has already delayed the CSeries jet's entry into service until the second half of 2015, adding a year to the schedule because of software issues and the need for more testing.

The company said that its lead CSeries test jet suffered an engine-related incident during ground maintenance testing. Bombardier said it was investigating with the support of Pratt, and wouldn't resume flight tests until the probe was completed.

The incident occurred on the Canadian plane maker's lead flight test aircraft at Bombardier's assembly plant at Mirabel, Qu├ębec. According to two people familiar with the incident, the failure inside the engine was " uncontained" and debris spewed out of its casing.

There were no injuries during the incident, said the Bombardier spokesman, who said both the engine and the airframe were damaged, but the extent was still being assessed.

Canada'sTransportation Safety Board said it had sent an investigator to Mirabel to probe what it described as an engine failure. Pratt said Friday that it was working closely with Bombardier to understand the incident.

The single-aisle CSeries, which flew for the first time in September, is designed to seat between 100 and 150 passengers and compete with the smallest jets offered by Airbus and Boeing. Bombardier already makes smaller regional jets, turboprops and business jets.

The new Pratt engine uses a geared system to let different parts of the engine spin at different speeds, offering better fuel consumption than traditional designs.

The company has staked its growth on the engine, and is preparing for a rapid increase in shipments over the next several years, said David Brantner, president of the commercial engines division, in a recent interview.

The CSeries had 203 firm orders as of March 31, and the bulk of the new engines selected by customers are destined for the new Airbus A320neo. Pratt delivered a set of "compliance engines" for testing to Airbus in mid-May, Mr. Brantner said. Those engines should be ready to enter airline service by the fourth quarter of 2015, Pratt officials said recently.

Earlier this month, Pratt officials said the new engines had completed more than 9,000 hours of testing, including more than 1,300 hours of flight testing.

The engine was certified by Transport Canada, the country's aviation regulator, in February 2013. Such incidents are rare during testing, but engine issues can setback certification schedules.

A Rolls-Royce Holdings PLC engine for a Boeing 787 Dreamliner suffered an uncontained failure in August 2010, traced to excessive engine oil during a ground test at the company's Derby, U.K. facility. The failure on the engine due for one of Boeing's test aircraft slowed its planned deliveries by several weeks and was one of several delays that slowed Boeing Dreamliner development.

The success of the CSeries is central to the growth of Bombardier's aerospace division, which had sales of $9.4 billion last year. The company has said the CSeries, should generate an estimated $5 billion to $8 billion in annual revenue when it reaches full production of 120 jets a year.

"It's very significant to the company," Canaccord Genuity analyst David Tyerman said.

Bombardier, like other jet makers, builds some cushion into its testing program and may still be able to meet its latest launch deadline, said analysts. Bombardier plans to introduce the CS100 jet--the smaller of the two planned CSeries planes--in the second half of 2015 and then the larger CS300 jet six months later.

Still, Bombardier has told investors some potential customers want more data and information about the continuing testing program before placing any orders, which could further delay their buying decisions, analysts said.

Bombardier shares were recently down 5.6% at 3.57 Canadian dollars, having been trading at C$3.77 before The Wall Street Journal reported Thursday's incident. United Technologies shares were down 10 cents at $116.24.

--Ted Mann, Ben Dummett, and Paul Vieira contributed to this article.

Write to Jon Ostrower at jon.ostrower@wsj.com

Subscribe to WSJ: http://online.wsj.com?mod=djnwires


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