March 11, 2009 / 12:22 PM / 9 years ago

UPDATE 2-Bombardier inks $1.53 bln deal with Lufthansa

* Initial deal for 30 planes worth $1.53 bln

* New CSeries expected to “sell like hotcakes”

* Bombardier shares up 11 percent (Adds details, quotes; in U.S. dollars unless noted)

By Claire Sibonney

TORONTO, March 11 (Reuters) - Bombardier Inc (BBDb.TO), signed a deal on Wednesday to sell 30 of its new CSeries aircraft to Deutsche Lufthansa AG (LHAG.DE) for about $1.53 billion, sending its shares up as much as 15 percent.

The agreement also gives the German airline an option to double the order for the new jets, which will be operated by Lufthansa’s Swiss International Airlines unit.

Lufthansa, Europe’s second biggest carrier, became the launch customer for the CSeries aircraft family in July 2008 when it signed a letter of interest for up to 60 planes, Bombardier Aerospace said in a statement.

The 110- to 149-seat CSeries is seen as a key development for the Montreal-based company, which is the world’s third-largest maker of civil aircraft and the No. 1 maker of rail equipment.

The aircraft marks a branching out from its current lines of regional jets and turboprops, which hold up to 100 passengers.

Bombardier will also be taking a more direct aim at aircraft produced by its bigger U.S. and European rivals, the Boeing (BA.N) 737 and Airbus EAD.PA A320 families.

Bombardier is touting the airplane’s advanced technology, which it says allows the CSeries to operate while using 20 percent less fuel than the older 737s and A320s.

The CSeries, which Bombardier plans to deliver in 2013, will also be the greenest single-aisle aircraft in its class, the company says.

“It’s going to sell like hotcakes,” Jacques Kavafian, an airline analyst with Research Capital, told Reuters.

“The company has five years to develop its backlog, so we’re not worried about the current economic environment,” Kavafian said. “They’re building this airplane for the next 25 years. The economy will turn around and people will continue to travel and airlines will continue to look at cheap economic airplanes and this one is the most economic in its class.”

Shares of Bombardier were up 28 Canadian cents, or nearly 11 percent, at C$2.86 on the Toronto Stock Exchange on Wednesday following the news.

Bombardier shares have been under pressure lately, falling about 35 percent so far this year, as the market for its corporate jets deteriorated with the weak economy and consumer air travel stalls.

The company said last month it would lay off 1,360 people because the downturn in the business jet market.

Bombardier has said that softness could be offset by an expected 10 percent rise in orders for its commercial aircraft. (Reporting by Claire Sibonney; editing by Rob Wilson)

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