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Bombardier in Talks on $2 Billion Orders With Delta, Lufthansa

Airboss

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Bombardier in Talks on $2 Billion Orders With Delta, Lufthansa
By Frederic Tomesco
Oct. 19 (Bloomberg) -- Bombardier Inc., the world's third- biggest maker of commercial aircraft, is in talks with Delta Air Lines Inc. and Deutsche Lufthansa AG for orders that may total more than $2 billion as sales heat up.
Delta is looking for as many as 50 planes, and Lufthansa may buy about 12, Bombardier executives said this week. Both carriers are considering the company's CRJ900 aircraft, which can sit 75 to 90 passengers and has a list price of $35.2 million. The airlines both said that no decisions have been made yet.
The interest may signal a new wave of demand for regional jetliners after a two-year slump that began as bankrupt U.S. airlines scaled back purchases. Bombardier this month announced its first U.S. regional-aircraft contract in more than a year, a 36-plane order from Northwest Airlines Corp. that may be worth about $1.35 billion at list prices.
``We are on a bit of a roll,'' Bombardier Vice President Barry MacKinnon said in an interview about demand for the CRJ900. ``We've got a lot of momentum on the program, and based on the sales activity, we do see that as being promising.''
The jetmaker is in talks with Delta and some of its partner airlines on an order for the CRJ900, Pierre Beaudoin, president of Montreal-based Bombardier's aerospace business, said in an interview in Orlando, Florida, yesterday. Delta partners Comair Holdings, SkyWest Inc. or Mesa Air Group Inc. may fly the planes if the order is concluded, he said, without elaborating.
Atlanta-based Delta, which filed for bankruptcy in September 2005, is already a Bombardier customer. The third-largest U.S. carrier expects to emerge from court protection by mid-2007.
The carrier is evaluating whether to add as many as 50 76- seat aircraft to the Delta Connection fleet, spokeswoman Betsy Talton said. No final decisions have been made, and an aircraft manufacturer hasn't been selected, she said.
Germany, Asia
Lufthansa, Europe's second-biggest airline, already flies Bombardier regional jets on some of its routes.
``We are in discussions with Lufthansa for additional CRJs above and beyond the 12 that they ordered,'' MacKinnon said in an interview Oct. 17. The size of the next purchase may be about the same as the initial order, he said.
Michael Lamberty, a spokesman in Frankfurt for Cologne, Germany-based Lufthansa, said the carrier is talking to both Bombardier and Brazilian rival Empresa Brasileira de Aeronautica SA, or Embraer. He declined to say how large the order might be or when it might be placed.
In Asia, MacKinnon said Bombardier is talking with Japan Airlines Corp., Asia's biggest carrier by sales, for an order of unspecified magnitude. Japan Airlines last month asked Bombardier and Embraer for proposals on 70- to 90-seat aircraft.
``It's hard to say how long it will take to close these deals,'' MacKinnon said. ``JAL is a bit further out and Lufthansa could take several months. These negotiations do take time.''
Picking Up
Bombardier has delivered fewer commuter planes in each of the past two years, depressing revenue at the regional-aircraft unit even as sales of business jets were surging. Earlier this year, the company suspended production of its CRJ200 plane in Montreal amid shrinking demand for the 50-seat jet.
Class B shares of Bombardier dropped 1 cent to C$3.73 in 11:44 a.m. Toronto Stock Exchange trading today. They have gained 49 percent in the past year.
Bombardier also wants to decide by the end of its fiscal year in January whether to proceed with the CRJ900X aircraft, a stretch version of its 90-seat model that would hold about 100 passengers, MacKinnon said. The 90-seater is a derivative of Bombardier's Challenger business jet, which was twice extended.
``We're pretty far along our discussions with a fair number of key clients for the 900X,'' he said. ``It's pretty clear to us the main initial market will be the European market.''
Stopgap
The 900X would compete with Embraer's 190 model, which seats as many as 106 people. At the end of September, the Brazilian jetmaker had 257 firm orders for the plane in its backlog.
``Not having a plane of more than 90 seats has hampered Bombardier,'' Jacques Kavafian, an analyst with Research Capital Corp., said in a telephone interview. ``The 900X will be a temporary solution, a stopgap.''
Stretching the 90-seater would cost about $300 million and entail such work as enlarging the wings and passenger windows, MacKinnon said. He declined to say how many employees would be required to build the aircraft.
``The surprise to us is the 100-seat market came sooner than expected,'' Beaudoin said. ``That's an area where we feel we need a product and that's why we are continuing to work on the CRJ900X.''
To contact the reporters on this story: Frederic Tomesco in Montreal at tomesco@bloomberg.net .
Last Updated: October 19, 2006 11:45 EDT
 

SennaP1

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Whats the upgrade time at Lufthansa. Gotta get over there.

Lufthansa here I come. F. Delta.
 

labbats

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So is everyone looking to the CRJ900 because only mainline flies the EMB190 or what? What an awful plane.
 

BigPappa

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SennaP1:

This is a classic response from a disgruntled individual, who probably works for a major. U just got the U-$UCK award! Way to go!
 

ReportCanoa

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So is everyone looking to the CRJ900 because only mainline flies the EMB190 or what? What an awful plane.

Yes. Alpa has decided that the difference between the CRJ-900 and the EMB190 is lack of the letters R-J in the commercial designation.
 

flyer172r

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Yes. Alpa has decided that the difference between the CRJ-900 and the EMB190 is lack of the letters R-J in the commercial designation.

In that case, I propose we all stop referring to it as the CRJ-900 and simply call it the C-900.
 

goahead

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Delta decided that since SKY flies them for half price they can double their orders for free. HA HA HA
 

WSurf

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General....... General!! Anyone see General????
 

spiffomatic

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Yes. Alpa has decided that the difference between the CRJ-900 and the EMB190 is lack of the letters R-J in the commercial designation.

Ironically the 190 type rating shows up as "ERJ-190" where as the 145 shows up as "EMB-145".

Communist plot no doubt to ensure depressed wages for pilots... "hey, the type says Regional Jet on it, so we must pay you 50 seat rates... the precedence has been set.
 

Soverytired

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I find it disgusting that a company that is currently in bankruptcy and is raping it's employees as hard and fast as it can is even able to even talk about placing an order for a BILLION dollars.

Ick.

I sincerely hope these go to Delta mainline pilots . . . AND that those bozos make it worth their while. If they agree to fly them for less than what the regionals are getting paid (work rules, yadda yadda) . . . WE GONNA GIT HOSED.
 

General Lee

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General....... General!! Anyone see General????

You bet. The only way to do that is by expanding mainline first. And, those planes are still only flown with 76 seats. Also, they only get 15 per year I believe. (with 76 seats) Expect an order for 50 mainline (obviously) 787s when we exit BK, along with 50 mainline 737-700s. No joke there. Also we are getting more 777s, and 757s from AA (ex TWA birds). The furloughed pilots have almost all been called back atleast once. Hiring could start as soon as FEB.

How's Daisy and Kooter by the way Wsurf? Fixen to cook fried crawdads with them soon on the dock? Any news on new Dash 8-300s or -400s for you? When will you upgrade on that -400?


Bye Bye--General Lee
 

WSurf

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No news on any aircraft! Daisy and Kooter say, "Come on Up to New Bern for a good time General"!!
 

michael707767

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think back to Deltas RFP for the DCI flying. It mentioned up to 50 76 seaters. These will be the airplanes for the RFP flying.
 

DGdaPilot

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What I don't understand is how Delta can brag about how aggressive they're gonna be when AMR (who's never been in bankruptcy) is holding off on orders for American and Eagle until "sustained profitability". My money's on AMR.
 

VeeOne

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It is my humble opinion that Delta is going to emerge from this a leaner, meaner, financial powerhouse. It will be a resurgence of the 80's culture at Delta mainline.
 

CitationLover

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In that case, I propose we all stop referring to it as the CRJ-900 and simply call it the C-900.

yes that way when picking up chicks it would go like this

her: "Oh so you're a pilot. What do you fly?"
me: "A See 9-0-0"
her: "A see 9-0-0, how big is that?"
me: "You know how big those military transport see seventeens are?"
her: "Yes"
me: "Well ours is a nine hundred!"

oh yeah!
 

EMB170Pilot

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yes that way when picking up chicks it would go like this

her: "Oh so you're a pilot. What do you fly?"
me: "A See 9-0-0"
her: "A see 9-0-0, how big is that?"
me: "You know how big those military transport see seventeens are?"
her: "Yes"
me: "Well ours is a nine hundred!"

oh yeah!

twisted the joke but still works....
 
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