MONTREAL — Bombardier Aerospace is continuing its efforts to make inroads in the Middle East and Africa with the sale of its first Q400 NextGen turboprop aircraft to Egypt.
The aircraft manufacturer announced Monday that it has received an order for two of the 70- to 80-seat planes from an Egyptian business charter company that is starting a new regional airline.
The order from Smart Aviation Co. is worth US$62 million based on list prices. It could increase to $158 million if options for three additional aircraft are exercised.
Smart Aviation has been a business jet charter company since it was founded in 2007. Its current fleet includes five Cessna Citation Sovereigns that carry up to two crew and nine passengers.
The company has formed a commercial airline subsidiary and plans to use the Toronto-made Q400s to launch scheduled and charter services throughout the Middle East.
“Middle East tourism and business travel are growing steadily and we want to be in a position to meet this growth with efficient, reliable, economical and passenger-friendly aircraft,” said Wael El-Maadawy, chairman and managing director of the Cairo-based company.
Petroleum Air Services of Egypt was previously the country’s only operator of Bombardier aircraft, with five Q300s.
El-Maadawy said these planes have excelled in the region’s operating environment for several years.
“So the Q400 NextGen aircraft was the first choice for our new service.”
Gary Scott, president of Bombardier Commercial Aircraft, said the Q400 is ideal for shorter, intra-regional routes in the expanding North African and Middle Eastern travel market.
“We at Bombardier are confident that the Q400 NextGen aircraft is well-suited to Smart Aviation’s new venture,” he stated.
Bombardier wouldn’t disclose when the planes will be delivered or when the options expire.
Montreal-based Bombardier (TSX:BBD.B) had received 391 firm Q400 orders and delivered 300 of the aircraft as of April 30 to more than 30 operators around the world.
As of October 2009, the company had more than 170 commercial planes in service or on order in the Middle East, Africa and Indian subcontinent.
These comprise 67 CRJ regional jets and 106 Q series products, including Dash 8 versions. Among Middle Eastern countries, Lebanon, Iraq, the United Arab Emirates, Saudi Arabia and Yemen have ordered a total of 41 CRJ and Q-series planes.
Bombardier is set to release its quarterly results Wednesday.
Analysts polled by Thomson Reuters expect the company’s earnings will decrease 26 per cent to eight cents US per share and that revenues will be nine per cent lower at US$4.5 billion.
David Tyerman of Canaccord Genuity said Bombardier’s shares could eventually enjoy a considerable rebound, but he warned that investors must be patient.
“We expect results to continue to lag in the second quarter as weak Bombardier Aerospace backlogs depress revenues and margins and the weaker euro has a negative translation impact on Bombardier Transportation sales and earnings,” Tyerman wrote in a report.
CIBC World Markets analyst Michael Willemse said he expects Bombardier will be “somewhat optimistic” on demand for business jets, which has started to improve, especially in China.
Industry observers will be watching for any indications the company is making progress in attracting orders for the CSeries.
The plane, which is set for delivery in 2013, is expected to face competition from Airbus.
On the Toronto Stock Exchange, Bombardier stock fell two cents to C$4.53 per share in afternoon trading.