China set to delay maiden flight of C919 commercial jet - sources

By Siva Govindasamy

SINGAPORE, May 13 (Reuters) - The maiden flight of China's Comac C919 commercial jet is behind schedule and its delivery could be pushed back as much as two years, sources familiar with the programme said, dimming its hopes of challenging Airbus and Boeing (NYSE: BA - news) .

The narrow-body aircraft, which will be able to carry 156-168 passengers and compete with the Airbus A320 and Boeing 737, was originally scheduled to fly by end-2015 but two sources said it would be delayed to the first half of 2016.

The final assembly of the first aircraft is taking longer than expected at the production facility in Shanghai, said the sources, who declined to be identified as they were not authorised to speak to the media.

"Comac is proceeding extremely cautiously with the first aircraft. It is deliberately checking everything ... to ensure that there are no safety issues," one source said.

State-owned Comac, which is leading the design, development and production efforts into the C919, declined to comment.

Industry observers believe the C919 can eventually challenge Airbus and Boeing in the narrow-body segment, which accounts for more than 50 percent of the aircraft in service.

Delivery of the first plane, scheduled for 2018, is also likely to slip, perhaps to as late as 2020, the sources said.

That means the C919 will be later, and a technologically inferior product, than the re-engined and improved variants of the 737 and A320 that will enter service in the next two years.

Comac has commitments for 450 C919s, mainly from Chinese airlines and leasing firms backed by Chinese banks and financial institutions. Further delays will make it harder for the plane to make an impact beyond its home market.

The first aircraft is in its sub-assembly facility, which is next to Shanghai's Pudong International Airport, and it will be rolled to the adjacent final assembly plant once the tail, vertical stabilizer and horizontal stabilizer are fixed.

The two CFM International Leap 1C engines, manufactured by a joint venture between General Electric's aviation unit and France's Snecma, will then be fixed.

Systems from international suppliers such as Honeywell, United Technologies subsidiary Goodrich, Rockwell Collins (NYSE: COL - news) and Parker Aerospace will be installed in the coming months.

"There is still a lot of work to do. At the pace that Comac is proceeding, they will only complete the systems integration around end-2015," one of the sources said.

The aircraft would then undergo ground tests which could take several more months, pushing the flight test programme further out.

Comac will be hoping to learn from its much-delayed 100-seat ARJ-21 jet, which received its type certification in December, more than 12 years after it was conceived. (Editing by Stephen Coates)