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Delta throws Bombardier a lifeline with deal to buy 75 CSeries
[NEW YORK] Delta Air Lines Inc on Thursday ordered 75 CSeries CS100 planes worth US$5.6 billion from Bombardier Inc, throwing a lifeline to a new aircraft program that is years late and billions of dollars over budget.
The widely anticipated order marks a turning point for Canada's Bombardier as it strives to break into the fleets of top airlines globally and serve a niche market for 100-seat planes that larger rivals Boeing Co and Airbus Group SE have neglected.
With the CSeries order, Delta said it would not induct Embraer's E190 into its fleet as planned. Delta had said in December it would add up to 20 Embraer 190 and 20 new Boeing 737-900ER jets. Bombardier said separately on Thursday that the deal included an option for Delta to buy an additional 50 CS100 aircraft.
For Delta, the deal allows it to phase out 50-seat jets that it contracts regional airlines to fly under its Delta Connection brand.
The larger CS100 planes burn less fuel per passenger and have room for two cabin classes rather than one, giving it the opportunity to up-sell customers to business.
The Bombardier aircraft will also be flown by Delta's own pilots, reducing Delta's reliance on contractors as a shortage of regional pilots looms in the United States.
Boeing beat out Bombardier to sell United Continental Holdings Inc 65 jets earlier this year. The planemaker is also studying whether to revise one version of its best-selling 737 jet to fend off the competition.
Swiss International Air Lines, a unit of Deutsche Lufthansa AG, expects to take delivery of its first CS100 at the end of June, with the first flight, from Zurich to Paris Charles de Gaulle, scheduled for July 15.
Air Canada has also signed a letter of intent to buy 45 CSeries, with an option for 30 more of the narrow-body aircraft.