Marks the biggest order Bombardier (TSE:BBD.B) has received for Aventra and will give a tremendous boost to the Derby plant
SmallCapPower | June 20, 2017: Bombardier Inc. (TSX: BBD.B) announced the signing of a contract on June 20, 2017, with FirstGroup and MTR amounting to US$1.1 billion to supply 750 Bombardier Aventra vehicles for the South West Train franchise. A Technical Services and Spares Supply Agreement has been placed for duration of the seven-year franchise, with an option to extend for 11 periods in line with the existing franchise extension option. The trains will effectively come into service from mid-2019 operating on the Windsor, Reading and West London suburban routes.
This order marks the biggest order the Company has received for Aventra and will give a tremendous boost to the Derby plant, which is facing challenges lately.
Related: Bombardier (TSX: BBD.B) Stock: Is it Worth the Risk?
Aventra trains are energy efficient (regenerative braking) and provide functional flexibility, i.e. they can be used as a metro to an intercity train. They offer wide-open gangways between carriages, air conditioning, Wi-Fi, 2 + 2 seating, USB sockets, universal toilets and improved passenger information system for an enhanced customer experience.
Additionally, at the International Paris Air Show, Bombardier Commercial Aircraft signed a letter of intent with India-based Spice Jet to supply 50 Q400 turboprop aircrafts amounting to US$1.7 billion. The order is broken into two parts, with 25 aircrafts as a definitive order and an option to buy additional 25 aircrafts.
Fred Cromer, Bombardier’s Commercial Aircraft President, said the “Spice Jet order is a sign that the demand for turboprop aircraft is healthy in short-to medium-haul markets that can’t economically support jets that are more expensive to operate.”
Post these announcements, shares of Bombardier closed 0.77% higher at $2.61, posting an intraday high of $2.67 on June 20, 2017.
Disclosure: Neither the author nor any of the principals at Small Cap Power, or their family members, own shares in any of the companies mentioned above.
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