Concern over future United Nations aircraft emissions standards was a factor in a Delta Air Lines Inc deal announced this week to buy 75 new CS100 jets from Bombardier Inc, a Delta executive said on Friday.
Advertisement
The Montreal-based carrier applauded Delta Air Lines for ordering up to 125 CSeries 100 planes, making it the largest customer for the new commercial jet.
The new order will bring the number of A321s entering Delta’s fleet to a total of 82, all scheduled to be delivered by the end of 2019.
“As we reshape our fleet for the future, the innovative onboard experience of the C Series is a ideal complement for the top-notch service provided every day by Delta people”, Ed Bastian, Delta’s incoming CEO, says in a statement.
Securing the order, however, does not appear to have come cheap for Bombardier, with its chief executive conceding the company had been “aggressive” on the pricing of its jets in order to clinch the deal. Even though the composite-bodied airliner is generally considered to be a fantastic plane with great performance characteristics, it hasn’t been able to successfully compete with offerings from Boeing and Airbus.
Based on the list price, the firm order is valued at approximately US$5.6 billion, Bombardier said.
What has Delta ordered: The U.S. airline has placed a firm order for 75 CS100 aircraft and obtained options to purchase another 50 aircraft.
DUP MP Gavin Robinson said the order “must be used as a platform for further growth and I will continue to do all possible to support the company in those endeavours”.
“The C Series has a huge advantage in terms of fuel efficiency and this contract offers encouragement that other airlines will follow suit”.
Analysts including Deutsche Bank’s Richard Phelan hope Ottawa will also pony up funds to shore up Bombardier’s balance sheet and “serve as an additional catalyst to keep up the momentum”.
Bombardier have conceded that the dual class structure is a factor in negotiations for a $1 billion cash infusion from the Canadian government.
But the development of the jet has been plagued with delays and is billions over budget.
In January, out-going Delta CEO Richard Anderson sent shares of Bombardier soaring when he expressed interest in the C-Series.
Shares of the company traded 1.88 percent down on Thursday.
Revenue for the quarter fell to US$3.14 billion compared with almost US$4.4 billion in the first three months of 2015.
Advertisement
“We actually think for the right price, it’s quite an impressive airplane”, Anderson said in January during the company’s earnings call. A day earlier Apple reported its first revenue decline in over a decade as iPhone sales fell.
