A plane flies over a Bombardier plant in Montreal on Jan. 21, 2014.Christinne Muschi/Reuters
Bombardier Inc.'s C Series jet program has won a big boost with a firm order for 40 planes from the aircraft leasing arm of Australia's Macquarie Group Ltd., one of the biggest purchase commitments yet.
An affiliate of Macquarie AirFinance is scheduled to begin taking delivery of the larger of the two C Series models – the CS300, in the 100-to-150-seat segment – in 2017. The estimated value of the deal is about $2.8-billion at list prices, but it is standard industry practice to grant discounts to big customers.
Macquarie AirFinance has also taken options on 10 more CS300 planes.
The transaction is a vote of confidence at a critical time for Montreal-based Bombardier's high-stakes C Series program, which has been plagued by delays and cost overruns.
The Macquarie purchase commitment "underscores the importance of the C Series' program's return to flight testing," Desjardins Capital Markets analyst Benoit Poirier said in a note to clients Friday.
This latest order should strengthen the view that test-flight resumption earlier this month after engine failure in May will continue to provide performance data confirming the jet's advantages, he said.
"More importantly, we believe that certain customers may be waiting for guaranteed performance levels before placing an order for the C Series."
Bombardier is in advanced talks with two Chinese customers for C Series aircraft, Mr. Poirier said.
Bombardier now has 243 firm orders for the C Series, edging closer to the company's target of 300 firm orders by the time the plane flies commercially. Bombardier is sticking to its goal of entry-into-service by the second half of 2015 despite much time lost in flight testing.
"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," Bombardier president of commercial aircraft Mike Arcamone said.
"We anticipate continued momentum in the C Series aircraft program as we confirm our performance predictions for the aircraft."
BMO Capital Markets analyst Fadi Chamoun said in a note that the Macquarie purchase agreement "is a high quality order from a well-respected aircraft leasing company." Among its 73 customers around the world are Air France, British Airways and Aeromexico.
In a video posted to its website Friday, Bombardier said the relationship with Macquarie will give it access to the leasing company's experienced sales team and enhanced access to its customers, helping expand the C Series brand globally.
"The CS300 will allow us to offer our customers the only type of aircraft optimized for the upper end of the 100- to 150-seat market segment," Macquarie AirFinance chairman Stephen Cook said.
The Macquarie order ties with another 40-C Series jet order from U.S. airline operator Republic Airways Holdings Inc. as Bombardier's largest. However, Republic has said that while it likes the plane, it no longer fits into its plans. Bombardier has said Republic's C Series order remains on the books.
Bertrand Marotte