Bombardier inks US$3.39 billion deal for sale of 100 aircraft in Russia

Deal is for 50 Q400 NextGen planes, and could include up to another 50.

August 28, 2013
News Release
Metalworking

(Photo: Bombardier)

MOSCOW -- Bombardier has signed a preliminary agreement with a Russian state corporation for the purchase of as many as 100 Q400 NextGen aircraft in a deal that could be worth up to US$3.39 billion.

The Montreal-based plane and train manufacturer says the deal with Rostekhnologii, a state corporation controlled by the Russian Federation, also includes the possibility of setting up a Q400 NextGen final assembly line in Russia to complement its Toronto operations.

It says the manufacturing facility in the Russian Federation is a key commercial requirement for the deal, and would be managed by a joint venture between the two parties. The line would produce aircraft for Russian customers

The sales and manufacturing agreement is expected to be finalized in 2014 and includes 50 Q400 NextGen aircraft to be sold to Russian operators and the potential placement of at least another 50 in the region.

"Developing local roots in strategic markets is at the core of Bombardier's strategic framework and we have identified Russia as being key to our growth and sustainability," said Mike Arcamone, president of Bombardier Commercial Aircraft.

"The agreements signed today are the next step towards ensuring our long-term competitive position in the Russian Federation and will help secure (Rostekhnologii's) ongoing establishment of an aviation centre of excellence."

There are currently more than 120 Bombardier commercial aircraft in service in Russia and the Commonwealth of Independent States, and Bombardier is forecasting a market demand of approximately 400 aircraft in the 20- to 99-seat market in the region over the next 20 years.

The Q400 NextGen turboprop airliner is the successor to Bombardier's Dash 8/Q-Series family of aircraft.

Alexey Fedorov, managing director of aviation projects at Rostekhnologii, said the deal will contribute to the fleet renewal of its airlines, improve flight safety and reduce fares on regional routes.

"We are entering an important stage of validation towards formalizing the creation of this joint venture that will lay the foundation for the future of Russian turboprop aviation," he said.