MONTREAL (AFX) - Analysts expect Bombardier Aerospace to decide within weeks to proceed with its $2.1-billion program to build a larger C-Series aircraft.
In a research report, UBS Investment Research said the board of directors of the world's third-largest airplane manufacturer will likely approve the program's launch by Jan. 31.
'We expect the board of directors to approve the launch of the program with the support of a risk-sharing partner,' wrote Fadi Chamoun.
Delivery of the first C110 aircraft, with 100 to 110 seats, could come by 2012, he added.
Company officials wouldn't confirm that a decision will be made, but said an update is forthcoming.
'By the end of January, Bombardier Aerospace will publish some kind of update of the C-Series program,' spokesman Marc Duchesne said in an interview.
He said Bombardier has been talking to Pratt & Whitney and CSM about supplying engines for the planes, which would seat 100 to 130 passengers. The latter company is a joint venture between General Electric Co. and French engine manufacturer Snecma.
'We're talking to various potential investors, potential customers and to main engine manufacturers so we're pretty positive about the program but it's too soon to give more details,' Duchesne said.
Proceeding with the aircraft could have a significant impact on Bombardier, Chamoun said.
'A successful strategy that addresses the market's shift to larger jets could strengthen Bombardier's RJ franchise with positive implications to value,' he wrote.
But he cautioned that the company's risk profile will increase unless its financial partners are -- 'unlikely in our view' -- either Boeing Co. or EADS, the European maker of the Airbus.
'We believe that caution is warranted in the near term,' he wrote, pointing the C-Series could negatively affect company value.
Bombardier put the C-Series on hold last winter after some analysts suggested there was a lack of customer interest in such a plane.
Aerospace division CEO Pierre Beaudoin said last November that the company would only proceed with a partner.
Shares of General Electric fell 31 cents to $37.43, while Boeing's share dropped 59 cents to $88.94 in afternoon trading on the New York Stock Exchange.
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