The Canadian Press - ONLINE EDITION

Swedish firm no longer wants to be recipient of first Bombardier CSeries plane

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MONTREAL - Swedish company Braathens Aviation says it no longer wants to be the first recipient of Bombardier's new CSeries commercial passenger jet because of uncertainty surrounding the program.

The aircraft has been grounded because of an engine incident three months ago.

"It has subsequently emerged that this may cause another delay to the CSeries introduction," Braathens said in a statement Friday.

"We have informed Bombardier that we will not assume the role of formal launch operator of the aircraft type. Due to increased uncertainty, we are discussing possible changes to the aircraft delivery schedule with Bombardier."

In 2011, Braathens put in a firm order for five CS100 planes and five CS300 models, for a total amount of $655 million. An option for 10 additional planes could boost the contract to $1.37 billion.

The delivery date was not announced when news of the order was made public.

The aircraft were to be flown in Sweden by Malmo Airlines.

Bombardier (TSX:BBD.B) spokesman Marc Duchesne played down the impact of Braathens' decision, saying such moves are the norm in the industry.

"They (companies) change business plans and therefore need different planes and at different dates," he said in an interview.

Duchesne said it had "never been confirmed in writing" that Malmo was to be the first airline to receive a CSeries plane.

"We're thinking of other airlines to take delivery of the first plane," he said, without mentioning whether any had shown interest in doing so.

He added that test flights on the CSeries should resume over the "next few weeks" and that things are "going really well."

Analyst Chris Murray of Altacorp Capital Research expects the tests to resume in the first half of September because he believes engine manufacturer Pratt & Whitney has solved the problem.

But Murray still believes the delays since the May 29 incident could stretch the deadline for the first deliveries.

"Any further major delay at this points likely sees EIS (entry into service) move into 2016, although we still believe it is more important for the company to adequately test and prove out the aircraft and avoid any concurrency issues."

Bombardier has 203 firm orders for the CSeries and hopes to reach 300 before it makes its first delivery. Including the 203 orders, it has 513 total commitments.

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