Bombardier closes in on deal to begin making Q400s this year in

MONTREAL — Bombardier Inc. said Monday it is close to finalizing an agreement to start producing its Q400 propeller-driven airliners in Russia.[np_storybar title=”Bombardier plane orders tumble in ‘challenging year for aviation’” link=”https://business.financialpost.com/2014/01/20/bombardier-inc-plane-orders-tumble-in-challenging-year-for-aviation/”%5DBombardier Inc. faulted a sluggish economy for a decline in new aircraft orders last year as sales of both its commercial and business jets foundered.The Montreal-based manufacturer said Monday it delivered 238 aircraft in 2013, five more aircraft than in the previous year. But new orders for its aircraft tumbled last year to 388 compared to 481 in 2012, net of cancellations.Continue reading [/np_storybar]A deal to establish a joint venture with state corporation Rostec could lead to some 100 turboprops, valued at US$3.4 billion at list prices, being built for the Russian market.The deal, which local media in Russia says will see production start this year, flows from a series of preliminary agreements signed last August.The final assembly line in Russia would complement Bombardier’s Toronto operations, where final assembly of the 70- to 80-seat turboprop currently take place.Bombardier Aerospace announced last week the permanent layoff of 1,700 employees, primarily in Montreal and Wichita, Kan., where it makes jets, as it steps up efforts to cut costs amid delays with two new aircraft and a tough market for both commercial and business planes.The Q400s are used by airlines around the world, including Toronto-based Porter Airlines and WestJet’s new Encore regional service and Air Canada-affliated Jazz.Bombardier spokesman Marc Duchesne wouldn’t confirm details of the agreement, but said it would include a firm order from Rostec for up to 100 planes that would involve Russian leasing company Ilyushin Finance Co.“Discussion between Bombardier and Rostec are ongoing and both sides are working toward the conclusion of a definitive agreement and things are going very well but we need a couple of more days just to finalize the details,” Duchesne said in an interview Monday.The Moscow Times quoted a Russian government official saying at the World Economic Forum in Davos that a deal had been signed and a Bombardier representative confirming the planes would be built in Russia’s Ulyanovsk region, about 900 kilometres east of Moscow.Analysts said the agreements are designed to deepen Bombardier’s roots in Russia by “locking in” the Russian market for the Q400 against its main rival ATR.They also had said the Russian agreements could “revitalize” the Q400, whose orders have been lagging.Bombardier delivered 29 Q400s and received 17 net orders last year. That compares to 36 deliveries and 50 net orders in the prior year.On the Toronto Stock Exchange, Bombardier’s shares gained one cent at $3.87 in Monday morning trading.

Leave a Reply

Your email address will not be published. Required fields are marked *