Massive change for NetJets. Wonder if they’ll begin to invest in Bombardier’s shorter-range aircraft.
Anyone familiar with their operations know where they’ll cut the fleet? FlexJet going to lose market share with owners going over to NetJets?
TORONTO (Dow Jones)–Bombardier Inc. (BBD.B.T) received its largest-ever business-jet order from Warren Buffett’s NetJets Inc., the world’s largest fractional jet operator, in a deal that could be worth more than $6.7 billion.
In early trading, Bombardier Class B shares jumped as much as 9.4%. The stock is now up 45 Canadian cents, or 7.3%, to C$6.59 on more than 2.8 million shares traded.
The firm order, worth $2.8 billion at list prices, is for 50 Global business jets and includes options for another 70 Global aircraft, which if exercised, values the entire order at more than $6.7 billion. The order comprises 30 Global 5000 Vision and Global Express XRS Vision aircraft, with deliveries set to begin in the last quarter of 2012, as well as 20 firm orders for the newly launched Global 7000 and Global 8000 jets to be delivered starting in 2017.
NetJets, owned by Buffett’s Berkshire Hathaway Inc. (BRKA), has a fleet of more than 800 planes but this marks the first time it’s ever ordered jets from Bombardier.
“It is a strong endorsement of Bombardier’s Global family of high-end business jets,” said National Bank Financial analyst Cameron Doerksen.
Montreal-based Bombardier said recently that it booked significantly more aircraft orders in the fiscal year ended Jan. 31, and that demand for business jets was particularly strong in the final quarter of the year, reflecting a gradual recovery in the global economy.