Bombardier Secures First Order for Larger CSeries Jetliner Worth Up to US$1.44 Billion

Strategic Insights -

Bombardier, Canada's only aircraft manufacturer, has secured its first order for the larger version of its new CSeries aircraft as part of a deal worth up to US$1.44 billion for 20 planes from an Irish-based leasing company. The firm order from Lease Corporation International Aviation Ltd. comes with options for a further 20 regional jets, underscoring the growing demand for the technologically advanced aircraft family.

Key Takeaways:

  • Bombardier has secured its first order for the larger CS300 version of its CSeries aircraft, with a total value of up to US$1.44 billion for 20 planes from Lease Corporation International Aviation Ltd.
  • The deal includes options for a further 20 regional jets, demonstrating the flexibility and appeal of the CSeries jetliner family to leasing companies.
  • The order follows an earlier contract with Deutsche Lufthansa AG for 30 of the smaller CSeries jets worth an estimated US$1.53 billion at list prices.
  • The CSeries aircraft, set to be delivered in the second half of 2013, will be powered by Pratt & Whitney's new PurePower geared turbofan engine, which promises to use less fuel, generate reduced noise, and emissions.
  • The order highlights the growing demand for aircraft in the 100-149 seat category, with market studies indicating a significant worldwide demand for such aircraft over the next two decades.
  • Analyst David Newman of National Bank Financial has rated Bombardier's shares as an outperform with a target share price of $4.25, forecasting fourth-quarter earnings per share of 13 cents, just shy of the consensus of 14 cents.

Statistics:

  • Total value of the order: up to US$1.44 billion
  • Number of CSeries jets ordered: 20 x CS100 and 17 x CS300
  • Options for further planes: 20 regional jets
  • Estimated value of Deutsche Lufthansa AG's earlier order: US$1.53 billion
  • Expected delivery date for CSeries aircraft: second half of 2013
  • List price of CSeries jetliners: not specified
  • Target share price for Bombardier: $4.25
  • Forecast fourth-quarter earnings per share: 13 cents

Sources:

  • Bombardier press release
  • Lease Corporation International Aviation Ltd. statement
  • Deutsche Lufthansa AG press release
  • National Bank Financial research note
  • Euclid Infotech Pvt. Ltd.