Agreement Includes 45 Firm Orders Plus Options To Purchase An Additional 30 Aircraft

Air Canada has entered into a Letter of Intent (LOI) with Bombardier Inc. for the acquisition of up to 75 Bombardier CS300 aircraft powered by Pratt & Whitney PurePower PW1500G engines as part of its narrowbody fleet renewal plan. The LOI contemplates 45 firm orders plus options to purchase up to an additional 30 aircraft and includes substitution rights to CS100 aircraft in certain circumstances.

Deliveries are scheduled to begin in late 2019 and extend to 2022. The first 25 aircraft on delivery will replace Air Canada's existing mainline fleet of Embraer E190 aircraft, with the incremental aircraft supporting Air Canada's hub and network growth, creating one of the world's youngest, most fuel efficient airline fleets.

The C Series purchase is subject to completion of final documentation and satisfaction of certain other closing conditions precedent.

"The renewal of our North American narrowbody fleet with more capable and efficient aircraft is a key element of our ongoing cost transformation program - plus the enhanced passenger cabin comfort provided by the CS300 will help us to retain Air Canada's competitive position as the only Four-Star international network carrier in North America," said Calin Rovinescu, President and CEO of Air Canada.

"The entry of the C Series into our fleet is expected to yield significant cost savings. We have estimated that the projected fuel burn and maintenance cost savings (on a per seat basis) of greater than 15 per cent should generate an estimated CASM reduction of approximately 10 per cent, when compared to the aircraft it will replace.

"Air Canada has a long history of collaboration with Bombardier. Air Canada Express regional partners operate one of  the largest fleets of Bombardier aircraft in the world with a mix of  over 135 regional jets and turboprop aircraft by December 31, 2016.

"We were one of the launch customers for the Canadair Regional Jet and today's announcement reflects our continued support for Canada's aerospace industry and for the new technologies the industry may develop. We fully expect the new technology of the C Series to efficiently meet the demanding needs of our current and future network strategy," Rovinescu said.

The acquisition of the C Series aircraft represents a key element of Air Canada's narrowbody fleet renewal program and complements the acquisition of 61 Boeing 737 MAX aircraft announced in December 2013 to replace the larger end of the airline's mainline narrowbody fleet. The Boeing agreement provides for Boeing to purchase up to 20 of the 45 Embraer E190 aircraft in Air Canada's fleet and the first 25 C Series will replace the remaining E190s. Boeing 737 MAX deliveries are scheduled to begin in late 2017 and extend to 2021, while the C Series deliveries are scheduled to start in late 2019 and extend to 2022.

(Source: Air Canada news release. Images from file)

FMI: www.bombardier.com