UPDATE 1-Chinese leasing firm may buy 30 Bombardier CSeries jets

Fri Oct 18, 2013 1:03pm EDT

By Solarina Ho

Oct 18 (Reuters) - Bombardier Inc's on Friday named Chinese leasing firm, CDB Leasing Co Ltd as the buyer of up to conditionally 30 of its all-new CSeries jetliner.

Bombardier said CDB had put in a conditional order for five CS100 and 10 of the larger CS300 in July 2012, although at the time it did not identify the buyer. CDB optioned another five CS100 and 10 CS300 planes, Bombardier said on Friday.

Bombardier also said test flights of its CSeries family of narrow-bodied, medium-haul jets were going well. The company is hoping that the craft can catapult it into the lower end of a market now dominated by Boeing Co and Airbus.

"We see a high probability that the current conditional order will be converted to a firm order, bringing the total order book for the CSeries to 192 firm," said RBC Capital markets analyst Walter Spracklin in a client note that highlighted the presence of Chinese President Xi Jinping and top Canadian officials at Bombardier's announcement.

Bombardier flew its CSeries jetliner for the first time on Sept. 16 after some nine months of delays. It currently has 177 firm orders for the plane, plus 226 commitments.

Spraklin said the conditional order by a Chinese leasing firm adds breadth to Bombardier's customer base, particularly in Asia, and an order from a leasing firm, which often waits for demand to build, shows confidence in the program.

"As such, we anticipate that this will be the first of several orders that will ultimately see Chinese carriers operating CSeries aircraft," he said.

Bombardier said the CS100 test plane, the first of five test planes, has completed three flight tests so far and has met all of its objectives, reaching an altitude of 25,000 feet and speeds of about 740 kilometers an hour.

"The aircraft performed exceptionally well and compares very well with our simulation," CSeries general manager Rob Dewar said in a video update, adding that this allows Bombardier to rely more on the simulator for further tests.

He said the other CSeries test planes are in advanced stages of assembly, and the first production aircraft is in the final stages of assembly in Mirabel, where Bombardier is also building a brand new facility to produce the planes.

The fuselage for the larger CS300, which can seat up to 160 passengers, is being shipped and expected to arrive in Mirabel later this month.

Bombardier has set an ambitious target of putting the first CSeries jet into commercial use within 12 months of the first flight and said it may update that timeline after further testing.

Bombardier shares were up 1.6 percent at C$5.07. At one point the shares touched their highest level since the end of July.

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California state worker Albert Jagow (L) goes over his retirement options with Calpers Retirement Program Specialist JeanAnn Kirkpatrick at the Calpers regional office in Sacramento, California October 21, 2009. Calpers, the largest U.S. public pension fund, manages retirement benefits for more than 1.6 million people, with assets comparable in value to the entire GDP of Israel. The Calpers investment portfolio had a historic drop in value, going from a peak of $250 billion in the fall of 2007 to $167 billion in March 2009, a loss of about a third during that period. It is now around $200 billion. REUTERS/Max Whittaker   (UNITED STATES) - RTXPWOZ

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