TURBOPROP SALES TO SPICEJET GIVE BOMBARDIER A BOOST.

SpiceJet Ltd. TRANSPORTATION

After a quiet opening day at the Paris Air Show, Bom

bardier Inc. announced Tuesday that it has secured a letter of intent from India’s SpiceJet Ltd. for up to 50 Q400 aircraft, a move one analyst says ensures the viability of the turboprop program.

The signed agreement for the purchase of 25 Q400 turboprops and the rights to buy an additional 25 jets could be worth up to US$ 1.7 billion, based on the list price of the jet, and is a sign that demand is healthy in markets that cannot support more expensive planes, said Bombardier’s commer- cial aircraft president Fred Cromer. SpiceJet currently operates 20 78- seat Q400 aircraft, and plans on configuring the new orders to an 86-seat model.

“This acquisition will help us f urther i ncrease connectivity to s maller towns and cities and help realize ( Indian) Prime Minister Narendra Modi’s vision of ensuring that every Indian can fly,” said Ajay Singh, SpiceJet’s chairman and managing director in a statement.

The order comes a day after the Montreal-based company announced it signed an agreement with Philippine Airlines Inc. for seven Q400s at the Paris Air Show, widely considered one of the most significant industry events f or c ommercial ai rl i ne manufacturers.

Desjardin Capital Markets analyst Benoit Poirier said in a note to clients that the new orders are a positive sign for the company.

“These announcements are likely to ensure the viability of the Q400 program as Bombardier had only 26 aircraft in its firm backlog as of March 31, which represented about a year of visibility on production,” Poirier wrote.

“With this order tally of 57 aircraft since the beginning of the show, Bombardier has posted its best order performance at a European air show since Farnborough 2014 ( 74 units), despite the absence of commitments on the CSeries.”

Bombardier ’ s s hares jumped to $2.67 shortly after markets opened in Toronto Tuesday, before closing up one cent at $2.63.

After a meeting with Bombardier’s management team, including chief executive Alain Bellemare, BMO Capital Markets analyst Fadi Chamoun said in a note to clients that management is optimistic about securing CSeries orders to support its target of 90 to 120 aircraft deliveries per year.

“Bombardier appears to be making progress in terms of customer discussions with both the number of airlines showing interest in the CSeries increasing (from every region of the world) and the maturity level of these discussions,” Chamoun wrote.

Chamoun also said the CSeries program is performing well in revenue service, which should support future commercial opportunities.

“In our view, the CSeries is proving to be a successful disrupter in the lower end of the narrow body segment with its best- in- class economics,” Chamoun wrote.

Bombardier’s ongoing trade dispute with rival Boeing Co. remains a source of risk for the program, Chamoun said, but management is confident in its defence and has received political support from the federal government. On Monday, the Trudeau government appeared to have given the American aerospace giant the cold shoulder in Paris, meeting with j et- fighter competitors while avoiding a sit- down with Boeing officials.