BUSINESS

Private jet firm NetJets to buy up to 275 new Bombardier Challenger jets

06/11/2012 06:06 EDT | Updated 08/11/2012 05:12 EDT
MONTREAL - Private jet company NetJets Inc. signed a deal Monday to buy up to 275 Challenger business jets from Bombardier (TSX:BBD.B) that could be worth up to US$7.3 billion.

Bombardier said it has also signed a 15-year service and maintenance agreement for the aircraft valued at as much as an additional US$2.3 billion if all the options are exercised.

"This purchase demonstrates our long-term planning and represents our ongoing commitment to providing unparalleled safety and service in aircraft uniquely customized for our owners," NetJets chairman and CEO Jordan Hansell said in a statement.

"We are confident that NetJets' market leadership and strong foundation position us to make long-term investments in our business to differentiate our fleet in ways that no one else in the industry can."

NetJets said the deal includes 75 firm orders and 125 options for the Challenger 300 Series aircraft as well as 25 firm orders and 50 options for the larger Challenger 605 Series aircraft.

The firm orders are worth $2.6 billion based on 2012 list prices.

The order follows a deal earlier this year that saw NetJets order up to 120 of Bombardier's Global business jets in a deal worth as much as US$6.7 billion.

"We are very proud that, once again, NetJets has selected Bombardier aircraft to grow and support the expansion of its fleet worldwide," said Steve Ridolfi, president of Bombardier Business Aircraft.

"These aircraft are renowned for their reliability, performance and wide cabin comfort. We are convinced that the Challenger jets will complement NetJets' existing fleet perfectly."

In addition to the Bombardier order, NetJets said Monday that it has placed an order for 150 Cessna Citation Latitudes, including 25 firm orders and options for 125 more, with deliveries beginning in 2016.

Besides now being a supplier to NetJets, Bombardier also competes with the company, which allows customers to buy a portion of a business jet, with its own fractional jet ownership business called Flexjet.

Flexjet offers customers whole and fractional ownership and management of business jets and access to two fleets, including its Learjet and Challenger aircraft as well as a network of charter operators.

Bombardier shares were down nine cents at $3.65 on the Toronto Stock Exchange on Monday.