Bombardier inks $1.5B Lufthansa deal

[Rockville]

Bombardier Inc. has finally landed a firm order for its C-Series aircraft program, putting the maker of planes and trains in competition with heavyweights Boeing Co. and Airbus SAS.
Montreal-based Bombardier said today that Deutsche Lufthansa AG has signed a firm purchase order for 30 C-Series aircraft in a deal valued at US$1.53 billion based on current list prices.
Lufthansa, which became the launch customer for the proposed 110 to 130-seat plane in July, also has options to purchase an additional 30 of the planes. They will be operated by the German carrier's Swiss Air Lines Ltd. subsidiary.
"Having Lufthansa – known throughout the airline industry for its stringent engineering and technical standards – sign this purchase agreement . . . confirms their confidence in the airplane and the future of the program," said Gary Scott, the president of Bombardier's commercial aircraft division, in a statement.
Investors reacted to the development by pushing up Bombardier's shares more than 11 per cent, or 29 cents, to $2.88 on the Toronto Stock Exchange Wednesday morning.
The long-range C-Series aircraft are slated for delivery in 2013 and would target global airlines who want to buy 100- to 149-passenger aircraft, a market now dominated by the world's two biggest commercial aviation companies, Chicago-based Boeing and Europe's Airbus Industries.
Bombardier's biggest current model is the 90-seat CRJ900 regional jet, although a 100-seat version is scheduled for its first delivery by the end of 2009. The company also builds Q-Series turboprops as well as Learjet, Challenger and Global Express corporate jets.
Bombardier officials have previously estimated the company could be producing as many as 150 C-Series jets a year by 2016 to meet demand for smaller airliners while Boeing and Airbus focus on wide-body models.
One of the main selling points is the jet's fuel efficiency, which is touted as about 20 per cent better than its competitors.
"Our purchase agreement with Bombardier for C-Series aircraft is a renewal of Lufthansa's commitment to commercial success balanced by environmental and business policies oriented toward sustainability and passenger comfort," said Nico Buchholz, Lufthansa's senior vice-president in charge of corporate fleet.
The 110-seat C-Series version will face a challenge from Brazil's Empresa Brasileira de Aeronautica SA. The Embraer E190 seats 98 to 114 passengers, while planes with similar capacity are also being designed by Russia's OAO Sukhoi Aviation Holding Co. and Mitsubishi Heavy Industries Ltd. of Japan.

AP, March 11, 2009