Bombardier announced (07-Nov-2012) it has delayed the first test flight for its CSeries aircraft from late 2012 to the end of Jun-2013. The delay is due to “certain issues, mainly related to some suppliers”. Bombardier stated together with all its suppliers, the company is working with the momentum gained over the last few months in order to fly by the revised date, which all parties have agreed is achievable. Bombardier reported the development programme is making solid progress, with the build for both the Complete Airframe Static Test (CAST) and the first flight test aircraft progressing well. Results from the integrated systems test and certification rig are as expected and we have met a number. Bombardier expects entry-into-service of the CS100 aircraft will occur approximately one year after first flight. The timeline for the CS300 aircraft remains unchanged with entry-into-service scheduled for the end of 2014. Bombardier CEO Pierre Beaudoin said the Dec-2012 time frame “had been set to keep suppliers to hard deadline, but some components are complex, and it made no sense to get some parts before others for the assembly". Mr Beaudoin said he does not expect any delays in CSeries orders due to the test flight push back.
Bombardier pushes CSeries test flight back six months
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Air Canada Part 2: Financial progress makes investment grade metrics more tangible
A decade ago it would have been unheard of for Air Canada to contemplate reaching an investment grade credit rating. The airline had emerged from bankruptcy protection, but was still struggling financially. It would teeter on the verge of another formal restructuring before setting out on a course to restructure its financial foundation – a process that has allowed the airline to improve its balance sheet and leverage.
Air Canada’s leverage targets for YE2018 will not meet the general proxy for an investment grade rating; however, its lower capital commitments and debt refinancing could create an opportunity for achieving that status beyond 2018.
Attaining an investment grade credit rating likely remains a longer term goal for Air Canada as its major financial goals in the short term remain paying down debt that is creeping up due to a fleet renewal, as well as funding growth to drive long-term shareholder value. More meaningful shareholder returns will likely occur once the company reaches what it deems as acceptable progress in debt management, and reaches a certain maturity level in growing its international network.
This is Part 2 in a two part series on Air Canada. Part 1 dealt with long haul LCC subsidiary, rouge.
Cathay Pacific adds A350 to Vancouver, preparing for Hong Kong Airlines' long haul entry
Cathay Pacific's fortunes have been weakened in recent years as competition mounts, mostly from greater regional capacity, some of which feeds other airlines' long haul hubs. Locally Cathay has faced home market competition from Hong Kong Airlines and LCC HK Express, which together have weakened Cathay on its regional services. Yet Cathay has been relatively insulated from the growing direct competition on long haul routes, which have supported its network in recent times and account for a high share of revenue.
Hong Kong Airlines is growing long haul to Australia and New Zealand, but its major threat to Cathay is on North American and European routes, to be launched with forthcoming A350s. Cathay appears to be making a pre-emptive strike by deploying its attention-getting A350 to increase flights to Vancouver, which Cathay expects to be an early Hong Kong Airlines destination.
This is the first time that Cathay is growing Vancouver since the entry of Oasis Hong Kong in 2007. After Oasis' subsequent collapse Cathay withdrew the additional capacity it had mounted. Hong Kong Airlines, however, has stronger backing – HNA – and is already known in the territory. Hong Kong Airlines' impact is guaranteed, but the question is to what extent. This depends on how Hong Kong Airlines sharpens as it becomes the city's second flagship airline.