An Airbus A220 lands at Toulouse-Blagnac airport, southwestern France. Airbus says JetBlue has signed a deal to buy 60 A220-300 aircraft. (Photo by THE CANADIAN PRESS)

JetBlue says Airbus joint venture with Bombardier secondary reason to order A220

MONTREAL — Shares of Bombardier Inc. hit a nearly seven-year high Wednesday after the C Series jet it developed secured the largest order since the announcement of a joint venture with Airbus.

JetBlue Airways Corp. ordered 60 of the aircraft, renamed by Airbus as the A220-300, for delivery starting in 2020 with the option for another 60 starting in 2025.

The firm deal announced late Tuesday was valued at US$5.4 billion at list prices, but airlines typically receive large discounts.

The airline said the plane’s economics was the primary motivation rather than Airbus taking majority control over the aircraft’s joint venture which happened after JetBlue launched its 15-month review.

“The marriage between Bombardier and Airbus was a secondary factor,” chief financial officer Stephen Priest said in a conference call.

“But the good news about that when it came to fruition was it allowed us to reshape our Airbus orderbook to make sure that we continue to maintain our mid- to high single-digit capacity growth over the foreseeable future.”

Bombardier shares climbed to $5.58 in early trading on the Toronto Stock Exchange, a price last reached in August 2011. They closed up three cents at $5.43 in the afternoon session.

Five A220 planes are scheduled to be delivered in the first year, ramping up to a high of 22 in 2024.

JetBlue will become the first American airline to fly the larger A220-300 with 130 to 140 seats. Delta Air Lines Inc. ordered 75 A220-100s in the spring of 2016.

The U.S. low-cost airline said it could switch some of its order to the smaller, 120-seat A220-100 plane.

JetBlue said the decision to order the aircraft was driven by three strategic factors: profitability from the plane’s low operating costs, flexibility to use both aircraft models and its range.

Priest said the A220 opens up the possibility of transcontinental flights and more options for overnight Caribbean flights.

“This is a game-changer for JetBlue. It’s a real margin builder for our business…and so we’re very, very confident with the orders,” Priest said.

The A220s will replace 60 Embraer E190 planes. JetBlue said it needs smaller planes, but the Embraer aircraft would require costly upgrades over the next decade.

The airline also considered the new Embraer 195 E-2 planes. Priest said the competition was very tight, but the aircraft selected aligns with the other Airbus planes in its fleet.

Analyst Benoit Poirier of Desjardins Capital Markets said JetBlue’s order confirms the strength of the Airbus–Bombardier partnership.

He said more A220 orders could be announced at the upcoming Farnborough Airshow.

Bombardier has said interest in the plane has surged since the announcement of the partnership.

Airbus recently said it could book more than 100 A220 orders by the end of the year and slightly more than 3,000 sales over the next 20 years.

Just Posted

Hospitalizations jump in Red Deer due to opioid poisonings

Small city hospitals impacted more by opioid crisis

Central Alberta councils learn more about Bighorn Country proposal

A collection of central Alberta politicians are learning more about the province’s… Continue reading

High-speed chase led to fatal collision, jury hears

A Delburne man accused of manslaughter caused a fatal rollover collision during… Continue reading

‘Part of the solution:’ Alberta seeks proposals to build new refinery

EDMONTON — Alberta is looking for someone to build a new oil… Continue reading

Online ads spoil Christmas surprises, raising privacy concerns: experts

Lisa Clyburn knew she had found the perfect gift for her nine-year-old… Continue reading

Sebastian Giovinco, Jonathan Osorio and Adriana Leon up for top CONCACAF awards

Toronto FC’s Sebastian Giovinco and Jonathan Osorio are up for CONCACAF male… Continue reading

Huitema, Cornelius named 2018 Canadian Youth International Players of the Year

TORONTO — Canada Soccer has named striker Jordyn Huitema and defender Derek… Continue reading

Review: Too much Spider-Man? Not in the Spider-Verse

You might be forgiven for feeling superhero overload this holiday season. Had… Continue reading

‘Modern Family’s’ Sarah Hyland had second kidney transplant

LOS ANGELES — “Modern Family” star Sarah Hyland says she had a… Continue reading

Orlando SC acquires Canadian Tesho Akindele in trade with FC Dallas for cash

ORLANDO, Fla. — Canadian forward Tesho Akindele was traded to Orlando City… Continue reading

Koskinen notches third shutout, McDavid gets winner as Oilers blank Flames 1-0

EDMONTON — The Edmonton Oilers appear to have shored up their defence… Continue reading

Most Read