Bombardier wins Air Canada order for CSeries jets; shares surge
By Allison Lampert
MONTREAL (Reuters) - Bombardier Inc (BBDb.TO: Quote) received the first order in 16 months for its CSeries jets, sending its shares up as much as 30 percent and overshadowing news of lower-than-expected quarterly results and plans to cut 7,000 jobs.
The Montreal-based company said on Wednesday that it signed a letter of intent to sell Air Canada AC.TO 45 CSeries, with an option for 30 more of the narrow body aircraft. The order is worth as much as $3.8 billion based on the CSeries' list price.
Separately, the Quebec government, which gave Bombardier a $1 billion lifeline last October, said it would drop a lawsuit against Air Canada tied to its not living up to aircraft maintenance commitments in the province. In return, the airline agreed to conduct maintenance on CSeries in the province.
Shares of Bombardier, which also benefited from a planned reverse stock split, closed up 21 percent at C$1.09 in Toronto after climbing to C$1.17.
Bombardier Chief Executive Officer Alain Bellemare said the company still wanted federal assistance for the CSeries, which has been plagued by delays and cost overruns.
"We are hoping the federal government would come very close to what Quebec did," Bellemare said on a conference call, referring to Quebec's equity stake in the CSeries.
The Canadian government said it is still in talks with the company on its request for aid and stressed that it had put no pressure on Air Canada to buy jets from Bombardier.
Ottawa promised on Wednesday to ease some restrictions on Air Canada to help the carrier be more competitive. Continued...