Bombardier inks $3 billion C-Series deal, eyes more

Thu Feb 25, 2010 4:56pm EST
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By John McCrank

TORONTO (Reuters) - Bombardier Inc said on Thursday it has signed a highly anticipated $3.06 billion deal to sell 40 of its new C-Series planes to Republic Airways Holding Inc, and that it looks forward to more deals as the commercial aerospace market stabilizes.

Bombardier, the world's No. 3 civil aircraft maker, said the agreement includes options for an additional 40 aircraft. If those options are exercised, the value of the deal would jump to about $6.34 billion.

Shares of the Montreal-based company gained 39 Canadian cents, or 7.1 percent, to C$5.87 on the Toronto Stock Exchange.

With the recession forcing many airlines to put off buying new planes, Bombardier had not had an order for its C-Series aircraft, the company's first foray in the narrow body 100-150 seat market, since last March. That's when it won C-Series orders from Deutsche Lufthansa AG and Lease Corp International Group.

"They obviously are expecting orders for the planes, but we haven't seen one for quite a while and I think there was probably a bit of angst in the marketplace, waiting for additional orders, so this should alleviate some of that," said Cameron Doerksen, an analyst at Versant Partners in Montreal.

Ben Boehm, vice-president of Bombardier's commercial aircraft programs, said the company is in active discussions with more than 65 potential customers worldwide and that he is confident more orders are on the way.

"I think the airlines are in a much better shape this year than they were last year and they're getting very confident and are starting to look forward as to what do they need to be looking out for the next 10 years," Boehm said in an interview.

Bombardier has now recorded firm orders for a total of 90 C-Series aircraft and has booked options for an another 90. The new plane is set to start flying in 2013.   Continued...

<p>Benjamin Boehm, Vice President, Commercial Aircraft Programs at Bombardier Inc., steps out of a mock-up of a future CSeries Bombardier aircraft displayed in their Montreal offices, September 14, 2009. REUTERS/Christinne Muschi</p>