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Bombardier books 5 firm orders with WestJet as airline looks to expand regional service

Bombardier books 5 firm orders with WestJet as airline looks to expand regional service

Bombardier (TSE:BBD.B) announced Thursday that WestJet (TSE:WJA) has signed a firm purchase agreement to convert five options for the train and plane maker's Q400 NextGen airliners. 

The conversion is of five of the 25 options booked by WestJet and announced in August 2012, along with the Canadian airline's firm order for 20 Q400 NextGen airliners. 

Based on the list price of the aircraft, the transaction announced today for WestJet's Encore regional carrier is valued at approximately US$167 million, said Bombardier.

"In just under one year, WestJet Encore has re-shaped the regional aircraft market in western Canada - opening new destinations and feeding traffic to WestJet's mainline network - all on the strength of WestJetters and the Q400 NextGen aircraft," said president and CEO of WestJet, Gregg Saretsky. 

Indeed, WestJet Encore has introduced service to Fort St. John, Nanaimo and Terrace, British Columbia; Brandon, Manitoba, and has added turboprop service to WestJet's existing western route network serving Winnipeg, Manitoba; as well as Saskatoon and Regina, Saskatchewan. 

Starting this spring, it will also service Fort McMurray, Alberta; Kelowna, British Columbia; Winnipeg, Manitoba, and will provide service between Toronto and Thunder Bay in Ontario.

"While the Q400 NextGen aircraft is well known for its efficiency on short-haul missions, we have also been able to leverage its jet-like speed to reach new destinations and connect cities further apart, and this will be instrumental as we look to expand Encore's service offering to our guests in eastern Canada," Saretsky said. 

The Q400 NextGen aircraft, which is built at Bombardier's Toronto, Ontario facility, is optimized for short-haul operations, but is built with extra capacity configuration, providing seats for up to 86 passengers.

Including WestJet's order, Montreal-based Bombardier has recorded firm orders for a total of 491 Q400 and Q400 NextGen aircraft. 

The world's third-biggest aircraft maker said yesterday it would delay the first test flight of its Learjet 85 business jet due to a systems glitch. A "systems issue" was discovered after a weather-related delay of the first flight last week, Reuters reported, quoting Annie Cossette, a spokeswoman for Bombardier's business aircraft division.

The Learjet 85, which fills a hole between midsize and super mid-sized commercial jets currently on the market, was initially scheduled to fly in early 2013. Yet successive delays pushed the first flight out until early 2014, before the latest setback.

The Learjet 85 delay is yet another blow for Bombardier, which has also run into successive delays in its new CSeries program as well in recent months. In January, Bombardier pushed out the first delivery date for the CSeries until late 2015, nearly two years behind schedule. 

Shares of Bombardier were unchanged this morning, at C$4.04 in Toronto.

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October 29 2015

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