Bombardier sells 75 CS100 planes to Delta in $5.6 billion deal

US-based Delta Air Lines has placed an order for 75 CS100 Bombardier aircraft with an option to purchase 50 more in a deal worth US $5.6 billion, the struggling Canadian aviation giant said Thursday.

The contract is a lifeline for Bombardier, which has been beset by recent financial difficulties.

"This order changes the game and it gives us new momentum," Bombardier chief executive Alain Bellemare said during a nationally televised press conference.

With the order, Delta becomes Bombardier's largest C Series customer and the US launch customer for the CS100, said Fred Cromer, head of the company's jetliner division.

It was the largest order ever for the 130-seat CS100, the smallest model in Bombardier's C Series.

Delta reserved the right to convert a number of the 50 optional planes into slightly roomier CS300 aircraft, which can carry up to 160 passengers, at a later date.

Deliveries are scheduled to begin in spring 2018.

"As we reshape our fleet for the future, the innovative onboard experience of the C Series is a perfect complement for the top-notch service provided every day by Delta people," incoming Delta chief executive Ed Bastian said.

"The C Series ... fits perfectly with the Delta fleet strategy," he said. "We are pleased to play an important role in Bombardier's future."

- Challenging Airbus, Boeing -

The C Series was launched to challenge the dominance of Airbus and Boeing in medium-range, single-aisle jetliners, and go head to head with their workhorses, the Airbus A320 and the Boeing 737.

BMO Capital Markets analyst Fadi Chamoun said this was Bombardier's "first major order that was cleanly won away from Boeing and Airbus ... not only on pricing but also on the merits of the C Series aircraft."

The Bombardier jetliner claims to offer significant fuel savings over its rivals but a two-year delay in development allowed competitors to freshen their lineups.

The plunge in oil prices has also made the C Series a harder sell.

Prior to the Delta deal and an Air Canada discounted purchase announced in February, Bombardier had received no new orders for its C Series since September 2014.

During this period, the company slashed more than 10 percent of its global workforce -- over 11,000 jobs -- to conserve cash.

The government of Quebec, where Bombardier is based, gave the company a US $1 billion lifeline in exchange for a 49.5 percent stake in the C Series program.

Analysts including Deutsche Bank's Richard Phelan hope Ottawa will also pony up funds to shore up Bombardier's balance sheet and "serve as an additional catalyst to keep up the momentum."

Bombardier made a request for funding in December but Prime Minister Justin Trudeau's government has so far been non-committal.

Deliveries of the C Series aircraft, meanwhile, are more than two years behind schedule and development costs have almost doubled to US $5.4 billion.

Analysts believe the C Series will not turn a profit until 2020.

The company's troubles were evident in its first quarter results, also released Thursday.

Bombardier posted a loss of US $34 million in the three months ending March 31, compared to a $170 million profit during the same period last year.

Quarterly revenues fell by 13 percent to US $3.9 billion. Both aircraft and trains divisions reported declining sales.