When temperatures fell this month at Mirabel airport outside Montreal, engineers from Canada’s Bombardier seized the opportunity. The C Series passenger jet under development at this site was due to undergo an extreme cold weather test. But, rather than take the jet to an expensive facility that would artificially deep-freeze the airliner, Bombardier’s engineers simply left it out overnight in temperatures of -28C. It still worked in the morning.

Such serendipity has been rare for Bombardier, the world’s third largest commercial jet maker by revenue, during the C Series’ development. The airliner — aimed at breaking the duopoly enjoyed by Airbus and Boeing in narrow-body passenger jets — is now scheduled to enter service in the second half this year, long after the original 2013 target. Costs — expected to reach $4bn — are running well beyond the initial estimates. Bombardier has secured only 243 orders for the aircraft, well short of the 300 it has been seeking by the time the jet starts commercial flights.

The C Series’ problems have contributed to a substantial weakening of the company’s financial position and on January 15 — the week of the cold-weather test — Bombardier issued a profit warning about its 2014 results. Margins for 2014 in both its aerospace and transportation divisions — Bombardier is the world’s biggest passenger train maker — would be 1 percentage point lower than anticipated. The company’s widely traded B Shares fell almost 26 per cent on the day of the announcement.

The question for Bombardier is whether the C Series’ difficulties are merely the kind of short-term blip that other aircraft manufacturers have experienced — and overcome — on big new jet projects, or a long-term risk to the company’s viability.

Richard Aboulafia, vice-president of analysis for Teal Group, the US-based aviation analysts, believes Bombardier should review whether to press head with the C Series, which he says was “probably ill-advised”.

“It’s just a part of a long-term process [by Bombardier] — massive over-reach, systematic underestimation of the resources required to complete the project; incomprehension of what their competitors would do,” he adds.

Bombardier executives are steadfastly enthusiastic about the C Series’ prospects in spite of various setbacks. The programme — which was first launched in 2004, postponed then restarted in 2008 — will provide aircraft with 110 or 135 seats. It is aimed at filling a niche between the 90 to 100-seat maximum capacity of most regional jets, and narrow-body aircraft — the Airbus A320 and Boeing 737 — that can carry between 110 and 220 passengers.

Bombardier’s jet resumed flight testing in September after a three-month hiatus because of a fire affecting its innovative engine that is meant to provide improved levels of fuel efficiency compared to existing airliners.

Pierre Beaudoin, Bombardier’s chief executive, describes the C Series as a “game changing product”, adding: “I feel very confident that the product is meeting the performance that we have specified, which is really key.” He adds Bombardier has “done its homework” and predicts there is a market for 7,000 jets over 20 years in the area where the C Series will compete.

Yet many others in the aviation industry believe the attractive deals that Airbus and Boeing have offered potential C Series customers could prevent Bombardier from ever winning enough orders to justify its investment.

Even Marwan Khalek, chief executive of Gama Aviation, an aircraft management company, who is confident about Bombardier’s future prospects, accepts the challenges are significant. “Taking Airbus and Boeing on is never going to be easy for anybody,” he says.

There are also concerns that development of the C Series could harm Bombardier’s better-established business jet business.

The company announced this month it was “pausing” development of its Learjet 85 midsize business jet, although Bombardier is pressing ahead with two large, long-range corporate aircraft, the Global 7000 and 8000.

Mr Aboulafia says the Global products have developed more slowly than they might have done because of Bombardier’s focus on the C Series.

Mr Beaudoin insists the spending on the C Series has had no effect on the Global corporate jets — and says the two complement each other, since aspects of the control technology are shared.

Yet the ultimate test is likely to be whether the C Series and new Global models encounter fresh delays on their entry into service dates, or consume still more of the company’s cash.

Analysts on a conference call on January 15 focused heavily on the company’s cash reserves and questioned Mr Beaudoin about the terms on which he might be able to secure new borrowing. When Standard & Poor’s cut Bombardier’s credit rating to B+ from BB- this month, it cited the “continued execution risk” of the C Series as a contributing factor.

Mr Aboulafia suggests Bombardier would be better off abandoning the C Series and focusing instead on its business jets and other businesses where it enjoys clear advantages.

Mr Beaudoin says Bombardier’s short-term capital resources — which amounted to $3.8bn at December 31, including $2.4bn in cash or cash equivalents — provide an adequate financial cushion for its jet development programmes. It had net debt of $5.7bn at September 30.

Mr Beaudoin concedes that the C Series requires “major financial commitment” but says Bombardier has “the liquidity to see through this programme”.

“With the C Series, as the programme has progressed we’ve shown that we can find solutions to make sure that we can finance this project appropriately and also finance the company for the long term,” he adds.

Chief hails long history of overcoming crises

As Pierre Beaudoin, Bombardier’s chief executive, pictured below, steers the company through its financial crunch, he can comfort himself that the business has survived many crises since his grandfather founded it in 1942, writes Robert Wright.

One of the most serious came in 1949 when the Quebec government started systematically clearing rural roads in winter. The decision removed the need for virtually all products made by the company that Joseph-Armand Bombardier had founded, and sales halved almost immediately. Bombardier produced tracked school buses and other vehicles intended to tackle the province’s snowbound winters.

The recreational snowmobile business subsequently suffered badly when the first oil price shock in 1973 slashed public demand for the fuel-hungry vehicles. The snowmobile operation — now separately listed as BRP — was spun off in 2003. Mr Beaudoin’s father, Laurent, married Joseph-Armand’s daughter. The Beaudoin-Bombardier families still control the company through owning 64 per cent of the Class A shares, which have 10 times the voting power of the more widely held Class B shares.

The company also faced tough decisions in the middle of the last decade after its purchase of AdTranz — the trainmaking business of Germany’s Daimler — in 2001 made it the world’s largest maker of passenger trains. Bombardier entered the trainmaking business to diversify after the oil price shock but found itself, after the AdTranz acquisition, struggling to create a viable business in Europe’s trainmaking industry, which had around twice the necessary capacity.

In early 2004, the company announced plans to cut 6,600 jobs — nearly a fifth of the workforce — and shut sites in Germany, Portugal, Sweden, Switzerland and the UK.

Mr Beaudoin presents the company’s overcoming of such past crises as evidence of the “vision” of its managers.

“Sometimes it will be challenging in the short term,” he says. “But we got to where we are.”