Bombardier lands £1bn Saudi contract
Published 17/01/2014 | 05:39
Belfast-based planemaker Bombardier has announced a £1bn deal for new aircraft – on the same day as it revealed a delay in its latest model entering service.
At the Bahrain Air Show this week, it was announced that the Al Qahtani Aviation Company could order up to 26 Bombardier CSeries planes, the wings of which were designed and are currently being built in Belfast. The planes will be operated by SaudiGulf Airlines, the newly launched national carrier for the Kingdom of Saudi Arabia.
Around 54 million passengers moved through Saudi Arabia's 27 airports last year.
However, Bombardier has also now said that the entry into service of the CS100 aircraft is now expected in the second half of 2015.
It will be followed approximately six months afterwards by the CS300 aircraft.
The company cited more time was needed for flight testing.
The first flight of the CS100 took place in September 2012.
Mike Arcamone, president of Bombardier Commercial Aircraft, said the flight test phase would require more time than originally anticipated.
"We are very pleased that no major design changes have been identified. This gives us confidence that we will meet our performance targets," he said.
"While the process has taken more time than we had expected, our suppliers are aligned with the programme schedule and together, we will continue to work closely to move the program steadily forward."
Meanwhile, Al Qahtani Aviation Company has signed a firm purchase agreement for 16 CS300 aircraft, with an option for an additional 10 CS300 jetliners.
Al Qahtani Aviation Company and SaudiGulf Airlines are both owned by Abdel Hadi Abdullah Al-Qahtani & Sons Group of Companies and based on the list price of the aircraft, the firm order for the 16 CS300 aircraft is valued at approximately $1.21bn (£730m).
Should all 10 options be exercised, the value of the contract would increase to $1.99bn (£1.21bn).
Sheikh Tariq Al Qahtani, chairman of SaudiGulf Airlines, said that this was an exciting time for the aviation industry in the Arab states and neighbouring regions.
"We are very excited about the CSeries aircraft's suitability for this market and the long-term success it will bring to the region," he said. "The CSeries aircraft will give us the opportunity to introduce a new, quality, premium airline and an economically sustainable business model in Saudi Arabia, serving the domestic market, the Gulf and Middle East."
Mr Arcamone added that the CS300 aircraft will allow for growth into new markets, such as the Indian subcontinent and parts of Europe, as the airline seeks to expand its network.