Jet maker Bombardier wins big Delta order

Jet maker Bombardier used 'aggressive' pricing to win big Delta order

Bombardier scored a major order for its new CSeries passenger jets from Delta Air Lines Inc on Thursday, boosting the Canadian manufacturer's stature in the airline industry even as it faces a long road back to profitability.

The order for 75 CS100 jets, worth an estimated $5.6 billion based on the list price, was the first from a major U.S. airline for the CSeries program, which is years behind schedule and billions of dollars over budget.

Quebec-based Bombardier hopes the deal marks a turning point in its attempt to break into the fleets of top airlines and serve the niche market for 100-seat planes that larger rivals Boeing and Airbus have neglected.

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.

Aerospace industry sources involved in negotiating similar deals estimated discounts as high as 75 percent may have been offered to reboot the CSeries program with a big order, matching some of the most aggressive pricing seen lately in the market.

Commercial jets typically sell for roughly half of their catalog prices before adjustments for inflation, according to those familiar with the business.

Bombardier said it would book a $500 million "onerous contract" charge in the second quarter related to the Delta order and a separate order from Air Canada in February.

[color=rgb(34, 34, 34)]The deal came as Bombardier pushes the Canadian government to inject $1 billion into the company, as Quebec's provincial government vowed to do last year. The talks with Ottawa have hit an impasse partly over federal demands for more oversight.[/color] [color=rgb(34, 34, 34)]The Delta order does not change the Canadian government's position on the issue, a source familiar with the matter said on condition of anonymity.[/color]


[color=rgb(34, 34, 34)] in.reuters.com/article/us-delta-air-line...ardier-idINKCN0XP19I [/color]

Excellent ...the Govt should act swiftly !

This is quite a symbolic victory over Boeing and Airbus.Probably will provide an encouraging stimulus for the project and help  the Bombardier business. Also Bombardier has already begun to increase its local workforce planning aroung 630 jobs during this year. Really good news for the employees for centain.

Why should Govt's help private corporations. ? They do not share their profits with taxpayers . Govt's shouldn't bail out private companies .
That is crony capitalism