NetJets, a private jet-sharing company owned by Warren Buffett’s Berkshire Hathaway, said it would buy up to 425 new business jets from Bombardier and from US plane-maker Cessna Aircraft in a $9.6bn (£6.16bn) deal to renew its North American and European fleets.
Bombardier’s portion of the order is worth up to $7.3bn and includes up to 275 of the company’s Challenger business aircraft. The transaction comprises 100 firm orders on two different types of Challenger jets, and options for 175 more.
“The market has been aware that Bombardier was a contender for the NetJets mid-size jet order, but the magnitude of the order is likely much larger than market expectations,” said National Bank Financial analyst Cameron Doerksen in a research note to clients.
Montreal-based Bombardier has also signed a long-term service agreement with NetJets that could be worth an extra $2.3bn if all of NetJets’ options on Bombardier aircraft are exercised. All in, the deal could be worth $9.6bn for Bombardier, more than a full-year’s revenue for the aerospace division.
Bombardier’s shares rose as high as C$4.02 in busy early morning dealings on the Toronto Stock Exchange, a gain of 10 per cent.
The surge is a welcome boost for the stock, which was down 46 per cent in the past year on concerns about orders for commercial planes and its new C-Series commercial jet.