Delta orders CSeries Jets from Bombardier to become the first U.S. based launch customer of the new Canadian built airplane. Delta Air Lines has agreed to buy at least 75 of the new hi-tech aircraft, with an option for up to another 50 planes. Delta picked the CS100 model, which is the smallest of the three versions Bombardier offers. The CS100 will seat 108 passengers in a dual class configuration, and up to 133 passengers in single class. Delivery of the new jets are slated to begin in 2018, and the deal includes conversion rights to the CS300 model. The CS300 model can seat 130 passengers in a dual class configuration, and up to 160 in an all coach layout.
Delta orders CSeries Jets, but at what cost?
The deal comes not a moment too soon for struggling Bombardier, as it represents the first major firm order in the last 19 months for the CSeries. The company did receive a letter of intent from Air Canada for up to 45 of the CS300 model version last February. Bombardier is hoping that will be converted into a firm order in the current quarter. The Air Canada commitment does come with a catch, as it gives the airline two years to decide on whether or not to finalize that deal. Delivery dates if the Air Canada announcement does get converted are set for 2019. There are many that speculated the Canadian Government was behind that announcement, as Bombardier is currently relying of funding from the local Quebec Government to stave off possible bankruptcy. The CSeries program is $2 billion over its original budget, and more than two years behind schedule. Reports have also suggested that Air Canada will pay as little as just $30 million per plane, a discount of almost 60% from the list price of around $72 million.
With a big order in place from Delta Air Lines, there may no longer be any urgency for the Canadian carrier to rush into that deal. Delta Air Lines has also been very aggressive in the price it has been willing to pay for new and used aircraft. Delta C.E.O. Richard H Anderson made waves last October when he suggested that used Boeing 777 aircraft could be acquired for as little as $10 million, a price Boeing has disputed. The Delta order is valued at $5.6 billion at list prices, but we can only guess at how big a discount the airline was able to negotiate. It has been announced that Delta C.E.O. Richard H Anderson will step down from his post this May, but will remain with the company as executive chairman of the board.
(All prices quoted above are in US dollars)
Image from www.bombardier.com