New Malaysia airline plans to buy Bombardier CSeries jets worth $1.5 billion

By Reuters

Mar 17, 2015 01:43 AM EDT

A new privately held Malaysian airline intends to buy 20 Bombardier Inc (BBDb.TO) CS100 aircraft for $1.5 billion, in what could be the Canadian planemaker's first order in Southeast Asia for its long-delayed CSeries passenger jet program.

The airline, called flymojo, could also buy 20 more aircraft, which would raise the value of the deal to $2.94 billion, according to a letter of intent announced on Tuesday at the Langkawi International Maritime and Aerospace show.

Montreal-based Bombardier is under pressure to bring the CSeries into service after years of delays and cost overruns. The smaller CS100 started test flights in 2013.

The company has tried to sell the CSeries to Southeast Asian airlines such as Malaysia's AirAsia Bhd (AIRA.KL) and Indonesia's Lion Air, but it has been unsuccessful in the face stiff competition from Boeing (BA.N) and Airbus (AIR.PA) in one of the region's fastest growing airline markets.

If the deal with flymojo is firmed up, it will finally give the Canadian planemaker a toehold in the region.

The airline will begin flying in the first quarter of 2016 and focus on regional routes, Managing Director Janardhanan Gopala Krishnan said, without disclosing details about its owners. The full-service airline will be based at Senai International Airport in Johor, near Singapore, but it was not immediately clear when it plans to firm up the Bombardier order.

Bombardier builds private jets and smaller passenger aircraft that can seat up to 100 passengers, and has spent billions developing the CSeries, which can seat up to 160 passengers. This puts it in direct competition with the smallest variants of the Airbus A320 and Boeing 737 family of aircraft.

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