Canada’s Boeing challenger just made a blockbuster deal with Delta

Canadian aircraft manufacturer Bombardier just won a blockbuster deal: 75 firm orders for its C-series jet by Delta Airlines.

This is the first deal between Bombardier and a leading North American airline that doesn’t have ties to the Canadian government. So it’s a major windfall for the until-now slow selling C-series.

The order marks a firm beachhead for Bombardier in the mainline business; the Canadian company has spent most of the past few decades building smaller aircraft.

At list price the order has a value of $5.6 billion — however Delta likely purchased the jets at a healthy discount.

The Bombardier C-Series has struggled over the past few years to win orders from major airlines. 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.

Earlier this year Bombardier lost two orders from United Airlines to Boeing’s 737NG, although the C-Series did pick up a crucial 45-aeroplane order from Air Canada in February. While the Air Canada sale is seen as a major step forward for the C-Series program, critics of the deal cite the close relationship of the airline and the aeroplane maker with the Canadian government as the driver for the deal. As a result, industry observers believe Bombardier still needs to land another order from a major North American airline for the C-Series to gain market validation.

Delta Airlines MD88
Delta Air Lines MD88. Flickr/Aero Icarus

Delta will likely use the CS100 airliner to expand its network, as well as help replace its ageing fleet of McDonnell Douglas MD88 jets.

In January, out-going Delta CEO Richard Anderson sent shares of Bombardier soaring when he expressed interest in the C-Series.

“We actually think for the right price, it’s quite an impressive aeroplane,” Anderson said in January during the company’s earnings call. “So we are taking a very serious look at it.”

Bombardier C Series

Anderson was particularly impressed with the C-Series’ highly efficient Pratt & Whitney PW1500G geared-turbofan-engines.

“The geared turbofan is really the first true innovation since the Boeing 787 Dreamliner revolutionised composite structures for aeroplane fuselages,” Anderson said. “It’s an impressive plane, particularly given the engine technology.”

The Bombardier C-Series is expected to enter service later this year with SWISS.

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