Belfast Telegraph

Friday 19 September 2014

Deal of the century

Bombardier wins multi-billion dollar order from US tycoon Buffett's firm

Despite the global financial crisis, there are the lucky few who still have the money to spend on travelling the world in style.

Bombardier planes part-made in Northern Ireland will soon be flying big names from business, sport and entertainment to their destinations.

Bombardier's historic billion pound deal with NetJets is the most exciting development in a love affair which began last year when the US firm ordered 50 Global business jets.

Now that deal has been topped with huge benefits for Northern Ireland.

Bombardier's Airport Road premises are where the centre fuselage and engine nacelles for Challenger aircraft are designed and manufactured. Bombardier is to supply at least 100 Challenger craft to NetJets in a deal worth $2bn (£1.3bn), but that total could rise to $7bn (£4.5bn) if options for a further 175 aircraft are taken up.

It won out over other global competitors including Gulfstream Aerospace, Brazil's Embraer, France's Dassault Aviation and Cessna Aircraft Co. in the hard-fought sales campaign.

The 15-year aftermarket clause alone, involving a maintenance and parts service, is valued at $820m (£525m) and could climb to $2.3bn (£1.47bn) if all 275 planes are eventually sold.

The news will bring cheer to staff at the company's east Belfast premises.

More than 400 of them work on the Challenger series from a total of around 5,000 staff and 250 contract employees.

The race is now on to deliver 75 of the 300 Series planes and 25 of the 605 craft, with delivery scheduled to begin in 2015.

David Raymond, deputy chairman of the council of Northern Ireland industry body the Aerospace, Defence and Security (ADS) group, has worked for a number of firms in the sector and is chairman at BASE Aerospace. He has said that the potential for growth in the aerospace industry is very real and imminent and that Bombardier's latest deal will have knock-on effects for others in the sector.

"While the negotiations obviously took place on a global scale, Michael Ryan and his team at Bombardier have to be congratulated for their role. This deal will be a huge boost to Northern Ireland and is something that Belfast will definitely benefit from.

"The challenge for Northern Ireland has been for it to lift and build and strengthen its supply chain.

"This new deal will give an opportunity for local smaller firms to really step up, improve their offering, show the world what we can do and prove that the aviation and aerospace industries in Northern Ireland can work together and deliver the goods."

Mr Raymond said the deal will have been hard-won.

"While the aerospace industry is growing at a tremendous rate, as airlines seek to upgrade and replace their stock, there are still financial difficulties everywhere and this will not have been a deal that was easily won.

"There will have been a lot of hard work going on behind the scenes."

Jordan Hansell, NetJets chairman and chief executive said that dealing with Bombardier was easy, because its experience in the industry means that the company understands customer needs.

However, the company would not be drawn on what sort of deal was struck.

But NetJets is not expected to have received the large discounts which are common for commercial aircraft.factfile

U2's Bono is such a keen customer of NetJets that his band performed a private show for 1,000 company clients in Denver last year. Owner Warren Buffett and golfing superstar Tiger Woods are also fans of the firm. Other celebrities who have owned stakes in NetJets aircraft include Andre Agassi, Pete Sampras and Arnold Schwarzenegger, among others. Some of the most successful private and public companies in the world such as General Electric, Gillette, and Sun Microsystems are also NetJets owners. While several business jet charter firms have gone into administration, NetJets is thriving with Buffett's backing.

100

Number of aeroplanes in the initial order

£1.3bn

What the deal is worth. It could rise to £4.5bn

400

The number who work on Challenger in Belfast

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