WRAPUP 2-Bombardier wins Air Canada order for CSeries jets; shares surge

Wed Feb 17, 2016 4:22pm EST
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* Company to slash workforce by about 7,000 over next two years

* Forecasts 2016 revenue below analysts' estimates

* Proposes reverse stock split

* Quebec government drops lawsuit against Air Canada (Adds details from conference call)

By Allison Lampert

MONTREAL, Feb 17 (Reuters) - Bombardier Inc 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 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.   Continued...