Newspaper article The Canadian Press

Bombardier Wins Small Consolation with Single Q400 Order from Luxair

Newspaper article The Canadian Press

Bombardier Wins Small Consolation with Single Q400 Order from Luxair

Article excerpt

Luxair orders another Q400 turboprop


Bombardier Aerospace received a small consolation prize Thursday in its ongoing battle with European turboprop rival ATR, winning an order for a single aircraft from Luxair valued at US$32.2 million.

The Montreal-based company said the national airline of Luxembourg has also taken an option on an additional aircraft, which would roughly double the value of the deal if it is exercised.

The airline currently operates a fleet of six Q400 and Q400 NextGen aircraft. Its CEO said the extra planes will lead to increased flights within the region.

Bombardier (TSX:BBD.B) has struggled to attract new orders for the 70- to 80-seat aircraft while ATR, the sister company of Airbus, has received broad interest for its cheaper, smaller and slower aircraft, especially from emerging countries.

Bombardier's product is more expensive at US$34 million compared with US$19 million for ATR, but the Q400's range is 900 kilometres longer at 2,500 kilometres.

The Q400 also has eight to 10 more seats, up to 35 per cent more cargo volume and can fly up to 90 knots faster than ATR's product. The Q400 also operates in harsher climates and can land on gravel surfaces.

Still, the Q400 order backlog stood at 36 as of June, half of which are for WestJet's Encore regional service. It has since announced a few orders, including the conversion of options for three aircraft by Horizon Air and a single order from RwandAir.

David Tyerman of Canaccord Genuity said Bombardier has to win substantially more orders to maintain its current production rate for the Q400.

"A single aircraft (order) is not going to change the equation at all so as they burn down the backlog...then they're going to have to at some point cut the production rate," he said in an interview.

That makes a potential joint venture in Russia so important, the analyst noted. Bombardier said in March that was working with Rostekhnologii, a state corporation controlled by the Russian Federation, to assess the creation of a joint venture to manage the production of aircraft for Russian customers. …

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