Bombardier says Airbus deal increasing confidence but no new C Series sales talks

Bombardier says Airbus deal increasing confidence but no new C Series sales talks

MONTREAL — Bombardier Inc. said its deal with Airbus has yet to ignite new sales discussions, but existing efforts have yielded results as the manufacturer announced a potential order with Africa’s largest airline.

“The confidence of certain customers has increased and the pace of some of those discussions has increased somewhat,” Colin Bole, Bombardier senior vice president commercial aerospace, said Tuesday.

Bombardier (TSX:BBD.B) has signed its second potential C Series order in less than two weeks after EgyptAir Holding Co. announced plans to purchase up to 24 of the plane’s larger version.

The agreement announced at the Dubai Airshow includes 12 CS300 aircraft with purchase rights for an additional 12 aircraft.

Bombardier said that based on the list price of the CS300, a firm order for 12 aircraft would be valued at about US$1.4 billion. That would double if the airline exercises the 12 purchase rights. However, airlines typically receive large discounts.

“It would be difficult to wish for a better carrier to establish our presence in the region,” Bole said in a conference call with reporters from Dubai.

“It’s a great template and it is something that will followed extremely closely by the other carriers in the regions and the sub regions in the area.”

The C Series has also been ordered by Iraqi Airways, Saudi Gulf and Gulf Air.

The national airline of Egypt told reporters in Dubai that while it has been studying the C Series for a long time, Airbus’ involvement makes them feel better about the program, Bombardier commercial aircraft president Fred Cromer added on the conference call.

EgyptAir chairman and CEO Safwat Musallam said the planes will help the airline to modernize its fleet.

“We selected the C Series aircraft because its excellent range will allow us to best serve domestic and regional destinations, including neighbouring Arab cities, the Middle East as well as several European destinations,” he stated in a news release.

The EgyptAir letter of intent and a deal for up to 31 planes announced Nov. 2 with an undisclosed customer are expected to be firmed up by the end of the year. That would raise the number of firm C Series orders to more than 400.

Bombardier said it remains confident that Boeing won’t be able to prove in its trade complaint that it has been damaged by the C Series since it doesn’t make a plane the size of the CS100 and wasn’t invited to bid on the Delta order.

Nonetheless, Cromer said Bombardier is developing contingency plans if high tariffs continue to be applied on aircraft manufactured in Canada and delivered to the U.S.

“We have opportunities to place some of those early Delta positions with other airlines,” he said. “And in the meantime we’re working with Delta — having announced our assembly line in Alabama —to ultimately deliver aircraft from Mobile to our customers in the United States.”

Cromer declined to say if the second assembly line in Alabama estimated by the company to be built at a cost of more than US$300 million would be affected by the maintenance of high U.S. duties.

On the Toronto Stock Exchange, Bombardier’s shares gained 2.3 per cent at C$3.13 in morning trading.

Ross Marowits, The Canadian Press

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