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Bombardier wins US$5.6 billion Delta deal, but still needs bailout funds
CANADIAN plane and train maker Bombardier has found a customer in Delta Air Lines for 75 of its C Series narrow-body jetliners, reports Bloomberg News.
The order is valued at US$5.6 billion based on list prices, and deliveries of CS100 jets will begin in 2018, said Montreal-based Bombardier.
Delta, which will become the largest operator of the aircraft, also has options for an additional 50 planes.
The deal snaps a 19-month slump without firm orders for the C Series, which has struggled to make inroads against single-aisle aircraft made by rivals Airbus and Boeing.
The agreement with Delta will also enable Bombardier CEO Alain Bellemare to exceed a target of 300 firm commitments for the C Series by the time the jet enters service in the third quarter.
The order is a "major boost for this programme and provides runway to allow the C Series to gain some traction in the marketplace," said Sterne Agee CRT analyst Peter Arment in New York.
Before the Delta deal, Bombardier had 243 firm orders for the C Series. The company also expects Air Canada to convert a letter of intent for at least 45 CS300 aircraft into a firm commitment, according to the Bombardier website.
The deal comes as the Canadian Liberal government considers a request from Bombardier for C$1 billion (US$796.4 million) in funding, the same amount the Quebec Liberal government has already pledged, reported CBC News.
University of Ottawa management professor Tyler Chamberlin said the Delta deal will not end Bombardier's problems.
Bombardier reported a first-quarter loss of US$161 million. Earlier this year, it announced it would be cutting 7,000 jobs over the next two years in the face of declining revenues.
Meanwhile, officials of Toronto's public transit system have expressed frustration that its order for more than 200 trams has encountered numerous delays.
The order is valued at US$5.6 billion based on list prices, and deliveries of CS100 jets will begin in 2018, said Montreal-based Bombardier.
Delta, which will become the largest operator of the aircraft, also has options for an additional 50 planes.
The deal snaps a 19-month slump without firm orders for the C Series, which has struggled to make inroads against single-aisle aircraft made by rivals Airbus and Boeing.
The agreement with Delta will also enable Bombardier CEO Alain Bellemare to exceed a target of 300 firm commitments for the C Series by the time the jet enters service in the third quarter.
The order is a "major boost for this programme and provides runway to allow the C Series to gain some traction in the marketplace," said Sterne Agee CRT analyst Peter Arment in New York.
Before the Delta deal, Bombardier had 243 firm orders for the C Series. The company also expects Air Canada to convert a letter of intent for at least 45 CS300 aircraft into a firm commitment, according to the Bombardier website.
The deal comes as the Canadian Liberal government considers a request from Bombardier for C$1 billion (US$796.4 million) in funding, the same amount the Quebec Liberal government has already pledged, reported CBC News.
University of Ottawa management professor Tyler Chamberlin said the Delta deal will not end Bombardier's problems.
Bombardier reported a first-quarter loss of US$161 million. Earlier this year, it announced it would be cutting 7,000 jobs over the next two years in the face of declining revenues.
Meanwhile, officials of Toronto's public transit system have expressed frustration that its order for more than 200 trams has encountered numerous delays.
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