March 11, 2009 / 9:23 PM / 9 years ago

UPDATE 3-Bombardier wins Lufthansa order for CSeries jets

* Initial deal for 30 planes, option for 30 more

* New CSeries expected to “sell like hotcakes”

* Bombardier shares 4.6 percent at C$2.71 (Recasts, adds analyst quotes; in U.S. dollars unless noted)

By Claire Sibonney

TORONTO, March 11 (Reuters) - Bombardier Inc (BBDb.TO) won its first firm order for its new CSeries commercial jetliner on Wednesday with a $1.53 billion deal for 30 airplanes from Deutsche Lufthansa AG (LHAG.DE).

The order, which sent Bombardier shares up as much as 15 percent, moves the Montreal-based company into closer competition with bigger rivals Boeing (BA.N) and Airbus EAD.PA. The CSeries seats between 110 and 149 passengers, and is Bombardier’s largest plane to date.

Bombardier shares rose 12 Canadian cents, or 4.6 percent to C$2.71, down from an intraday high of C$2.99.

“The marketplace that they’re pursuing is a group of geriatric planes plus the bottom end of the Boeing and Airbus range,” said Richard Stoneman, an airline analyst with Dundee Capital Markets.

He said the CSeries aircraft will initially replace Lufthansa’s BAE Systems’ (BAES.L) BAE146 model, that was produced from 1978 to 1992.

The agreement also gives the German airline an option to acquire 30 more of 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’s aerospace division said in a statement.

The new plane series is seen as a key development for Montreal-based Bombardier, which is the world’s third-largest maker of civil aircraft and the No. 1 maker of rail equipment.

The aircraft, scheduled for delivery from 2013, will let Bombardier branch out from its current lines of regional jets and turboprops, which carry up to 100 passengers.

Bombardier says its advanced technology allows the CSeries to operate while using 20 percent less fuel than the older Boeing 737 and Airbus A320 families.

The CSeries 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.

“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.”

Bombardier shares have fallen about 39 percent so far this year as the market for its corporate jets weakened with the global economy and consumer air travel stalled.

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

Bombardier has said an expected 10 percent rise in orders for commercial aircraft could offset that softness.

$1=$1.28 Canadian Reporting by Claire Sibonney; editing by Janet Guttsman

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