BUSINESS

Macquarie AirFinance orders 40 Bombardier CS300 jets, for lease to airlines

09/26/2014 10:14 EDT | Updated 11/26/2014 05:59 EST
MONTREAL - Bombardier's CSeries program received a boost Friday when Macquarie AirFinance placed among the largest potential orders to date for the commercial jetliner, just weeks after flight testing resumed.

The Montreal-based aircraft maker said an affiliate of the Ireland-based leasing company placed a firm order for 40 of the larger CS300 jetliners, with options for 10 more.

The firm order is worth US$3.14 billion at list prices and US$3.95 billion with options, although customers typically receive discounts for large orders.

Macquarie AirFinance, which currently owns or manages 136 jet aircraft leased to 73 operators in 43 countries, will lease the planes after they are delivered between 2017 and 2019.

"Macquarie AirFinance's selection of the CS300 aircraft is a strong endorsement of the aircraft type and we are looking forward to working with this unique lessor to expand the market for our 100 per cent new jetliner," said Mike Arcamone, president, Bombardier commercial aircraft.

The firm order is the first since program testing resumed Sept. 7 after a more than three-month pause following an engine failure during ground maintenance testing. The firm order matches the 40 aircraft ordered by Republic Airways, which also has options on 40 others. Deutsche Lufthansa is the largest customer of the smaller CS100, with 30 firm orders and 40 options.

Arcamone said Bombardier (TSX:BBD.B) anticipates "continued momentum" for the CSeries as testing confirms the promised fuel, noise, cost and other operating performance.

Macquarie is a new Bombardier customer and the largest leasing company to sign on to the CSeries.

The CSeries is in the midst of flight testing that's required before the CSeries jets can go into commercial use. The Montreal-based aerospace and rail equipment company has said it's confident the CS100 aircraft will enter into service in the second half of 2015, with the larger CS300 following about six months later.

Including Macquarie's order, Bombardier has booked orders and commitments for 563 CSeries aircraft, including firm orders for 243 CSeries airliners. Bombardier expects to receive 300 firm orders from 20 customers by entry-into-service.

Bombardier says it's in discussions with customers to be launch customers for both variants of the aircraft. Swedish company Braathens Aviation (Malmo) recently said it no longer wants to be the first recipient of the aircraft due to uncertainty surrounding the program, but did not cancel its order for five CS100 and five CS300 models.

Markets reacted positively to the news, with Bombardier stock closing up 13 cents, or 3.71 per cent, at $3.63 on 12.1 million shares, making the issue the most active on the Toronto Stock Exchange.

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Note to readers: This is a corrected story: A previous version incorrectly valued the order at US$2.8 billion at list prices and US$3.6 billion with options