Bombardier landed the high-profile U.S. customer it has long been seeking for its C Series narrow-body jetliner, as Delta Air Lines agreed to buy at least 75 of the state-of-the-art airplanes.
The order is valued at $5.6 billion based on list prices, and deliveries of CS100 jets will begin in 2018, Montreal-based Bombardier said Thursday in a statement. Delta, which will become the largest operator of the aircraft, also has options for an additional 50 planes. Carriers typically negotiate discounts on jet purchases.
The deal snaps a 19-month slump without firm orders for the C Series, which has struggled to make inroads against single-aisle aircraft made by rivals Airbus Group and Boeing. The agreement with Delta will also enable Bombardier Chief Executive Officer Alain Bellemare to exceed a target of 300 firm commitments for the C Series by the time the jet enters service in the third quarter.
The order is a “major boost for this program and provides runway to allow the C Series to gain some traction in the marketplace,” Peter Arment, an analyst at Sterne Agee CRT in New York, said in a note to clients.
Before the agreement with Delta, Bombardier had racked up 243 firm orders for the C Series, which is more than two years late and more than $2 billion over budget. The company also expects Air Canada to convert a letter of intent for at least 45 CS300 aircraft into a firm commitment this quarter, according to a quarterly filing posted Thursday on the Bombardier website.
“It’s a turning point for the program,” Bellemare said in a telephone interview. “It gives us very strong momentum and will fill up the skyline for the next few years.”
Bombardier says the C Series, with a composite frame and a new engine made by the Pratt & Whitney unit of United Technologies, will cut fuel consumption by about 20 percent compared with competing models while also making less noise.
Deutsche Lufthansa’s Swiss International unit will become the first carrier globally to operate the jet when it deploys CS100s on European routes. With the order, Delta overtakes Macquarie Group and Republic Airways Holdings as the biggest buyer of the C Series.