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Bombardier Inc. has bulked up the order book for its new C Series airplane with a sale of 15 of the narrow-bodied commercial jets as the Farnborough International Air Show begins in Britain.
A new customer has placed a conditional order for 15 C Series aircraft in a deal that would be worth $1.02-billion US at list prices, the Montreal-based transportation giant said in a statement Sunday.
The order is conditional because some final items remain to be sorted out, Ben Boehm, vice-president of international business for Bombardier Aerospace said in a telephone interview from London.
The airline insisted that it not be identified for competitive reasons, Boehm said, as well as the lower operating costs the C Series plane will provide over existing planes in the 100-149 seat segment of the narrow-bodied airplane market.
"We are radio silent on this," he said.
Bombardier has sold the airline five of its CS100 planes and 10 CS300 models. The smaller CS100 carries a list price of $58.3 million while the larger CS300 fetches $66.6 million. Airlines typically receive discounts of 30 percent or more from list price, however, especially in the period before a new airplane makes its first flight.
Once the conditions are ironed out, this latest sale will add to the order book for the $3.4-billion Cdn project, which is Bombardier's bid to vault into the market for large commercial airplanes that is dominated now by Airbus SAS of France and Chicago-based Boeing Co.
There are 138 firm orders, 179 options, purchase rights and letters of intent and now a new conditional order for 15 planes.
The next 18 months are critical for the project as Bombardier develops and manufactures the plane for its planned first flight before the end of this year and delivery to the first before the end of 2013.
The company plans to have 300 firm orders from 30 customers by the time the plane begins hauling passengers for airlines next year. A key component to hitting that target will be meeting the scheduled deadline for the airplane's first flight at the end of the year.
Airlines are skeptical about new airplane delivery schedules in the wake of lengthy delays by Airbus and Boeing in delivering their A350 and 787 wide-bodied airplanes.
Boehm reiterated Sunday what Bombardier executives have been saying for months in the face of additional skepticism from investors and the analyst community: that so far, the plane is on time and any challenges to meeting the delivery schedule have been overcome.
The development of the C Series sparked Airbus to offer new, more fuel-efficient engines on its A320 family of airplanes, including the A319 that competes directly with the Bombardier plane.
The Airbus move to develop what it calls the A310NEO (for new engine option) spurred Boeing to offer new engines on its 737, called the 737MAX, to protect its franchise in the narrow-bodied segment, which also includes the Brazilian-made Embraer E190 and 195, although the Embraer planes have fewer than 100 seats.
Airbus and Boeing will duke it out for A320NEO and 737MAX orders at the show, analyst Walter Spracklin, who follows Bombardier for RBC Dominion Securities Inc., said in a note to clients.
"The key here for Bombardier, however, will be the ratio of orders between the C Series as compared to the A319NEO, 737-7MAX, or the E190/195, which are more direct competitors on a seat capacity perspective," Spracklin wrote. "We think Bombardier could announce a couple of 10-plus C Series orders at [Farnborough] and will likely retain their new order market share lead against the A319NEO and 737-7MAX."