The Montreal-based company said the national airline of Luxembourg has also taken an option on an additional aircraft, which would roughly double the value of the deal if it is exercised.
The airline currently operates a fleet of six Q400 and Q400 NextGen aircraft. Its CEO said the extra planes will lead to increased flights within the region.
Bombardier (TSX:BBD.B) has struggled to attract new orders for the 70- to 80-seat aircraft while ATR, the sister company of Airbus, has received broad interest for its cheaper, smaller and slower aircraft, especially from emerging countries.
Bombardier's product is more expensive at US$34 million compared with US$19 million for ATR, but the Q400's range is 900 kilometres longer at 2,500 kilometres.
The Q400 also has eight to 10 more seats, up to 35 per cent more cargo volume and can fly up to 90 knots faster than ATR's product. The Q400 also operates in harsher climates and can land on gravel surfaces.
Still, the Q400 order backlog stood at 36 as of June, half of which are for WestJet's Encore regional service. It has since announced a few orders, including the conversion of options for three aircraft by Horizon Air and a single order from RwandAir.
David Tyerman of Canaccord Genuity said Bombardier has to win substantially more orders to maintain its current production rate for the Q400.
"A single aircraft (order) is not going to change the equation at all so as they burn down the backlog...then they're going to have to at some point cut the production rate," he said in an interview.
That makes a potential joint venture in Russia so important, the analyst noted. Bombardier said in March that was working with Rostekhnologii, a state corporation controlled by the Russian Federation, to assess the creation of a joint venture to manage the production of aircraft for Russian customers. A deal could lead to an order for up to 100 aircraft worth US$3.4 billion.
"If they win this Russian thing, and they do some more stuff along that line, then that obviously would be a big shot in the arm for the program," Tyerman added.
Bombardier has also suggested that it may produce a cheaper turboprop to better compete with ATR, especially with countries outside its main customer base in North America and Europe that want less expensive planes.
While the Q400 struggles to find customers, EADS-owned ATR continues to announce multiple orders, including 83 firm orders and 90 options valued at up to US$4.1 billion at last summer's Paris Airshow.
Meanwhile, Danish leasing firm Nordic Aviation Capital (NAC) announced Thursday that it will add up to 40 ATR planes to an earlier order placed with ATR at the show, worth another US$1 billion if the 25 options are exercised.
And earlier this week Garuda Indonesia and NAC announced the purchase of up to 35 ATR 72-600s instead of the Q400, although both have been Bombardier customers in the past. The aircraft being purchased by NAC in the deal will be leased to Garuda.
Garuda and NAC have received 11 of 18 Bombardier CRJ1000 jet aircraft placed on firm order for use by Indonesia's national carrier. Garuda also has options to purchase 18 more of the regional jets.
Bombardier spokeswoman Marianella de la Barrera said failing to win the Indonesian turboprop order wasn't the "preferred outcome" but transactions have to make economic sense.
"We still think that it's the value proposition that others are signing onto," she said of the Q400. "It's unfortunate that they didn't see it the same way but we are encouraged by the high level of interest we're seeing in other growth markets (such as) Africa and Russia."Suggest a correction