Bombardier Inc sealed the second deal for its C Series jet since reaching a landmark agreement with Airbus SE a few weeks ago that will see the European planemaker take control of the program and help revive the fortunes of the narrow-body plane.
EgyptAir Airlines Co. plans to buy 12 of Bombardier’s biggest variant of the jet the CS300, and has options for a further 12, the carrier said Tuesday at the Dubai Air Show. The deal is valued at $1.1 billion before discounts.
The accord is a significant win for Bombardier, which gains another customer for its new jet less than a month after the company agreed to cede control of the C Series to Airbus in exchange for the European planemaker’s marketing heft and manufacturing expertise. The aircraft had been plagued by delays and cost overruns, and recently was hit with 300 percent tariffs in the U.S. after a trade complaint by Boeing Co.
Bombardier Chief Executive Officer Alain Bellemare told analysts two weeks ago that he expected sales of the C Series would accelerate following the deal with Airbus. Its presence is “adding confidence about the long-term success of the program,” he said Nov. 2.
That same day, Montreal-based Bombardier said an unidentified European customer was planning to buy 31 C Series aircraft with options for 30 more. Bombardier hasn’t sealed a major purchase since Delta Air Lines Inc. ordered 75 planes in April of last year.
The CS300 carries a list price of $89.5 million, although discounts of 50 percent or more are common in the industry. The jet, the larger of two C Series versions, can carry 130 to 160 passengers.
Airbus has vowed to cut the aircraft’s production costs and secure thousands of new orders for the C Series, which Bombardier spent more than $6 billion to develop. The C Series was two-and-a-half years late and more than $2 billion over budget when it entered service at Deutsche Lufthansa AG’s Swiss International unit in July 2016. Swiss and Air Baltic Corp., which began flying the CS300 in December, have reported better-than-expected fuel efficiency, which is key to the jet’s appeal.
EgyptAir is separately expected to unveil a deal for at least six Boeing Co.’s 787 Dreamliners, the first passenger jets made from strands of carbon fiber, said people familiar with the discussions. Airbus SE has also been in talks to secure a commitment from the carrier, the people said.
The shopping spree, following months of negotiations, marks an expansion push for Egypt’s flag carrier after it weathered slumping tourist visits and a fatal crash last year. Egypt Civil Aviation Minister Sherif Fathy said last month that the government expected to pay about $3.3 billion of the cost to acquire 45 planes.