Bombardier in spotlight as market watches for Delta deal, AGM
By Allison Lampert and Euan Rocha
MONTREAL/TORONTO (Reuters) - Canadian planemaker Bombardier Inc (BBDb.TO: Quote) faces a pivotal week that may see a key deal announced with Delta Air Lines Inc (DAL.N: Quote) but a federal aid package is unlikely to be approved in time for its annual meeting on Friday.
The deal with Atlanta-based Delta for up to 125 CSeries jets is critical for Bombardier as Delta would be the first major U.S. airline to purchase the CSeries, which is entering service years late and billions of dollars overbudget.
Delta’s board is widely expected to approve the purchase, which includes 75 initial orders, this week.
A Delta commitment, coupled with a firmed up agreement for 45 CSeries jets with Air Canada (AC.TO: Quote), would put Bombardier's CSeries order book above the 300 mark, allowing the company to hit a psychologically-important internal target by the time the first plane enters service in July 2016.
"It is a flagship customer outside of Canada, which may enable and help them to capture other orders and it establishes the CSeries as a real player in the market," said Morningstar analyst Chris Higgins.
Delta could not immediately be reached for comment.
The advance in CSeries order talks comes as Canada's federal government and Bombardier remain far apart over a $1 billion aid package.
The government wants a say in the suppliers Bombardier is using for the plane program, two sources said, and has asked the company to modify its dual-class share structure which favors the founding Bombardier-Beaudoin family. Continued...