BUSINESS

Bombardier in talks with Air Baltic about order for Q400 turboprops

09/25/2012 03:58 EDT | Updated 11/25/2012 05:12 EST
MONTREAL - Bombardier Aerospace confirmed Tuesday that it is in discussions with Air Baltic about an order for several Q400 turboprops that could be added to the airline's fleet that will eventually include the manufacturer's larger CSeries jet.

Spokeswoman Marianella de la Barrera said the order for Toronto-made Q400s would be for new planes coming off the production line, but declined to say how many planes could be purchased.

"Discussions are ongoing and we'll confirm an order when agreements are finalized," she said in an interview.

Trade publication Air Transport World reported that the Latvia-based airline will add four Q400s next May and June. The deal would be worth more than US$120 million at the current list price.

Airline CEO Martin Gauss said it had considered adding used planes but decided instead on new aircraft that will come from an operating lessor instead of a sale-leaseback arrangement.

"The fact is that the serial numbers of four brand new Q400s should be on our apron next spring," ATW quoted Gauss.

The airline will operate 10 Boeing 737s, eight Q400s and two Fokker 50s this winter, along with two Boeing 757s on lease in Cambodia.

In July, Air Baltic signed a letter of intent to buy 10 CS300 CSeries aircraft and take purchase rights on a further 10 of the passenger jets.

Based on the list price of the CS300, the contract is worth approximately US$764 million and could increase to US$1.57 billion should the 10 purchase rights be converted to firm orders.

De la Barrera said Air Baltic is a great customer for Bombardier because Latvia is a transit point for Europe, Russia, the CIS, the Middle East and Central Asia.

"We're thrilled that they're using the Q400 for their domestic travel and now they're looking at the CS300 for its network to be able to reach those markets that are further afield,she added.

On the Toronto Stock Exchange, Bombardier's (TSX:BBD.B) shares lost one cent at C$3.70 in afternoon trading.