In­creas­ing con­fi­dence

Bom­bardier says Air­bus deal has yet to ig­nite new C Se­ries sales talks

The Telegram (St. John’s) - - BUSINESS - BY ROSS MAROWITS

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.”

REMY DE LA MAUVINIERE/THE CANA­DIAN PRESS/AP

The Bom­bardier CS300 per­forms its demon­stra­tion flight at the Paris Air Show in Le Bour­get, north of Paris, on June 17, 2015.

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