November 17, 2015 / 9:35 PM / 3 years ago

UPDATE 1-Bombardier to sell 20 business jets to Flexjet, worth $544 mln

(Rewrites with comment from Bombardier executive, industry forecast)

By Allison Lampert

LAS VEGAS, Nov 17 (Reuters) - Bombardier Inc said on Tuesday it has agreed to sell 20 of its Challenger 350 business jets to Flexjet LLC in a deal valued at about $544 million based on list prices of the aircraft.

Flexjet, owned by Directional Aviation Capital, is one of the world’s largest private jet travel firms, largely through its fractional ownership programs, where customers buy a ‘share’ in a plane rather than purchasing one outright.

The provisional order, in the form of a memorandum of understanding, comes as a boost for Bombardier, which in recent months has seen its order book affected by struggles with its CSeries line of passenger jets, as well as delays with its new business jets.

In May, Bombardier scaled back production of its larger Global 5000 and 6000 business jets because of weaker demand from markets like China and Russia.

David Coleal, president of Bombardier Business Aircraft, said weaker demand from emerging markets also impacted sales of the super-mid sized Challenger, but there was no change in production rate.

“Those economies affect both products,” Coleal said. “This year we were over-producing the Global and we had the Challenger rates right.”

On Sunday, Honeywell International Inc. published a forecast that said sales of business jets are expected to slow next year as weakening economies and simmering political tensions delay corporate purchases. (Additional reporting by Euan Rocha; Editing by Sandra Maler and Bill Rigby)

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