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Bombardier to build turboprop in Russia, lands $3.4 bn in orders

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(Globalpost/GlobalPost)

Canada's Bombardier on Wednesday partnered with a Russian state holding company to assemble its Q400 NextGen regional turboprop in Russia and immediately landed orders for 100 of the aircraft worth $3.4 billion at list prices.

Bombardier signed a letter of intent for an assembly facility to be located in the Ulyanovsk region in central Russia with Rostec, which promotes the production and export of hi-tech and defence equipment, during the MAKS airshow outside of Moscow.

The facility, with a maximum capacity of 24 aircraft per year, will be built by a 50-50 joint venture and represents an investment of $100 million, said Rostec.

Rostec's Avia Capital Services unit placed preliminary order for 50 of the 80-90 seat regional aircraft that will be finalised once the joint venture is established.

Ilyushin Finance Company, another aircraft leasing company that is also controlled by the Russian state, also placed an order for the aircraft.

Bombardier said the final assembly line in Russia would produce aircraft for the local market and would be in addition to output at its facilities in Toronto.

"Developing local roots in strategic markets is at the core of Bombardier's strategic framework, and we have identified Russia as being key to our growth and sustainability," the head of the company's commercial aircraft unit, Mike Arcamone, said in a statement.

Bombardier forecasts market demand of 400 aircraft in the 60-99 seat turboprop segment over the next 20 years in Russia and the Commonwealth of Independent States.

The company said it has more than 120 aircraft in commercial service in the region.

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http://www.globalpost.com/dispatch/news/afp/130828/bombardier-build-turboprop-russia-lands-34-bn-orders