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Berkshire Hathaway's NetJets announced Monday it would purchase 475 new aircraft, including up to 275 from Bombardier Inc. (BBD.B-T), which it is calling the largest purchase in aviation history.
The purchase has a total value of about $9.6 billion US.
Shares in Bombardier Inc. jumped on Tuesday on news that the planemaker had won what analysts said was the biggest business jet order in its history.
"To say this is a big deal for Bombardier is an understatement," Robert Kokonis, president, AirTrav, tells BNN. At list prices, he says, Bombardier will earn between $6.5 to $6.9 billion.
Bombardier will receive 100 firm aircraft orders for its challenger jets, with an option for 175 more. NetJets will also purchase up to 150 Cessna Citation Latitudes, with 25 firm orders.
"The market has been aware that Bombardier was a contender for the NetJets mid-size jet order, but the magnitude of the order is likely much larger than market expectations," said National Bank Financial analyst Cameron Doerksen in a research note to clients.
Kokonis says the vast majority of the work done by Bombardier for this order will be in Canada. The additional units added to what he calls an already busy production line will add "more than a few months of man-days of production."
NetJets offers its customers fractional ownership and rentals of aircraft.
In a statement, Steve Ridolfi, President, Bombardier Business Aircraft said "We are convinced that the Challenger jets will complement NetJets'existing fleet perfectly. After selecting our Global aircraft last year, this new order is a fantastic endorsement of Bombardier's large cabin product portfolio."
With files from Reuters