Bombardier signs record $7.8 billion deal with VistaJet
TORONTO/LONDON (Reuters) - Bombardier Inc (BBDb.TO) has signed its largest business jet deal ever, an order from private Swiss charter operator VistaJet for up to 142 Global planes worth more than $7.8 billion (4.8 billion pounds), the Canadian company said on Tuesday.
Shares of Bombardier were up 7.7 percent at C$3.36 in early trading.
The deal eclipses Bombardier's previous peak sale to NetJets in June, an order of up to 275 Challenger jets valued at $7.3 billion (4.5 billion pounds), and demonstrates the planemaker's strong position in the market, analysts said.
"By any standard, this is a historic order for Bombardier," said Steve Ridolfi, president of Bombardier Business Aircraft.
VistaJet has placed a firm order for 56 jets worth $3.1 billion (1.9 billion pounds), with options on 86 more planes. Bombardier, the world's third-biggest planemaker, said deliveries were scheduled to begin in 2014.
The order is valued at more than $7.8 billion, based at 2012 list prices, but airlines typically negotiate steep discounts when they buy planes in bulk.
VistaJet, which has operations in such locations as London, Moscow, Dubai and Beijing, said the order was a key part of its expansion plans and a push to make business aviation more accessible in emerging markets.
"VistaJet is a longtime Bombardier customer and exclusive operator of Bombardier business jets," said National Bank Financial analyst Cameron Doerksen. "The company had previously indicated that it was contemplating additional large orders, but the size of this order has to be considered a surprise."
VistaJet's firm order is for 25 Global 5000, 25 Global 6000 and 6 Global 8000 jets. The optional order is for 40 Global 5000, 40 Global 6000 and 6 Global 8000 jets.
The aircraft will be used to serve growth markets including Russia, China, all of the Middle East and all of Africa, as well as the U.S. East Coast and West Coast, said VistaJet Chairman and founder Thomas Flohr.
"These orders reinforce the outlook for solid growth in production rates in the large-cabin business aircraft segment over the next several years," said BMO Capital Markets analyst Fadi Chamoun. "Bombardier continues to gain market share in business jets through strong product positioning."
The order comes three weeks after Bombardier pushed back the first flight of its C-Series jetliner by six months due to delayed deliveries from suppliers, sending its shares lower.
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