February 15, 2018 / 11:05 AM / 3 months ago

Delta says will take CSeries jets made in Canada, U.S.

(Reuters) - Delta Air Lines Inc said on Thursday it will proceed with plans to buy some Canadian-made CSeries jets from Bombardier Inc this year, after a U.S. trade ruling stopped the United States from imposing steep duties on the aircraft.

FILE PHOTO: A Bombardier logo is seen at the Bombardier plant in Belfast, Northern Ireland January 26, 2018. REUTERS/Clodagh Kilcoyne/File Photo

The Atlanta-based airline said in a statement it intended to meet “contractual commitments” and would start taking deliveries this year of the 75 CSeries jets it ordered in 2016.

The jets are made at a plant in the Canadian province of Quebec. Production is set to begin for U.S. customers at an Airbus SE plant in Mobile, Alabama, after the European planemaker closes a deal this year to acquire a majority stake in the CSeries program.

“Delta still intends to take as many deliveries as possible from the new Airbus/Bombardier facility in Mobile, Alabama, as soon as that facility is up and running,” the carrier said.

Delivering to Delta from Canada, as opposed to waiting for the new U.S. plant, would help Bombardier meet its target of 40 CSeries deliveries this year, up from 17 in 2017.

On Wednesday, the International Trade Commission said it rejected hefty U.S. duties on the CSeries jets partly because Boeing Co had lost no sales or revenue during the Delta deal.

Boeing is reviewing the panel’s decision, a company spokesman said on Thursday. The planemaker claimed Bombardier was selling its 110- to 130-seat CSeries in the United States below their cost.

Boeing could appeal the decision, but risks straining its relationship with Canada after applying to stay in a race to supply 88 fighter planes to the country.

Delta has also expressed interest in being an early customer of the U.S. planemaker’s planned mid-market jet.

“There are just a lot of rewards in walking away from this whole thing,” aerospace analyst Richard Aboulafia said of Boeing.

Bombardier shares were up 10 percent in afternoon trading after the International Trade Commission comments and a quarterly earnings report that beat analyst expectations.

On a conference call with analysts, Chief Executive Alain Bellemare described growing demand for Bombardier’s business jets and said he was prepared to boost production if the market supported it.

The company said it expected revenue to grow to between $17 billion and $17.5 billion this year, and to more than $20 billion by 2020.

Bombardier reported fourth-quarter adjusted earnings of 2 cents a share, beating analysts’ average forecast that it would break even, according to Thomson Reuters I/B/E/S.

Reporting by Allison Lampert in Montreal and Alana Wise in New York; Editing by Bernadette Baum and Ian Simpson

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