Bombardier ends CSeries order drought with upgraded interest from airBaltic

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MONTREAL - Bombardier has ended a five-month sales drought for its CSeries passenger jet with two deals in as many days for the new aircraft.

The company announced Thursday a firm order for 10 CS300 aircraft from airBaltic, plus an option to buy an additional 10 planes,

The Latvian airline's firm order, which is a conversion from a letter of intent announced at the Farnborough Air Show in July, has a list value of US$764 million, but could be worth up to US$1.57 billion if all the options are exercised.

On Wednesday, Bombardier said an unidentified airline based in the Americas signed a letter of intent to up 30 CS100 CSeries planes, worth up to US$2.08 billion.

AirBaltic CEO Martin Gauss said Thursday it firmed up its interest in the CSeries following an analysis of the plane and its rivals.

"A modern and efficient fleet is one of the fundamentals of the airline business, and this order is a progressive and exciting move forward for us," he said in a news release.

The airline is moving to an all-Bombardier fleet as it replaces older aircraft with more environmentally friendly planes. It also plans to add more Q400s to its fleet of eight turboprops.

AirBaltic serves 60 destinations in Europe, Scandinavia, Russia, CIS and the Middle East from its base in the Latvian capital of Riga.

"Recognized as one of the world's most innovative airlines, airBaltic demonstrates the growing demand and need for unmatched technologies, operational flexibility and efficiencies," stated Mike Arcamone, president of Bombardier Commercial Aircraft.

As of Sept. 30, Bombardier had booked orders and commitments for 352 CSeries aircraft from 14 customers, including firm orders for 138 CSeries airliners from 10 customers.

The firm order and letter of intent this week marked the first announced commitment for the Cseries since July, when airBaltic signed a letter of intent and an unnamed buyer placed a conditional order for five CS100 and 10 of the larger CS300 aircraft, valued at about US$1 billion.

Bombardier recently delayed the launch of the smaller CSeries aircraft to June 2014, followed by the larger 110- to 149-seat CS300 by December 2014.

The company said the wings for the first CSeries flight test aircraft are being joined to the fuselage at the company's final assembly plant in Mirabel, Que, after having arrived from Bombardier Aerospace Belfast.

It said assembly was progressing smoothly ahead of the first flight scheduled for the end of June.

Evan Mann, an analyst with corporate bond research company Gimme Credit, said the announcements were positive given Bombardier's goal of obtaining 300 orders by the time the CSeries enters into service.

He had previously raised concerns about the CSeries delay.

"Although this schedule change won't increase project costs, it will extend the company's negative free cash flow generation and we were concerned it would make it more difficult to secure new CSeries orders over the near term," he wrote in a report.

On the Toronto Stock Exchange, Bombardier's shares gained eight cents, or 2.24 per cent, at C$3.65 in midday trading.