Bombardier Talks With Northwest on Jet Order-Report
MONTREAL (Reuters) - Bombardier Inc. is in talks with Northwest Airlines Corp. , the U.S. No. 4 airline, on a $1.5 billion order for 75 of the Canadian aircraft maker's Canadair Regional Jets, the Journal de Montreal said on Tuesday.
The French language tabloid said Northwest would like to conclude the transaction in the next 30 to 60 days and would seek a Canadian government guarantee of financial backing. Bombardier declined to comment on the report.
In mid-April, Bombardier won a $1.5 billion order to supply 75 regional jets to Air Wisconsin, a United Airlines affiliate, after the Canadian government agreed to provide up to $1.1 billion of low-interest financing to Air Wisconsin.
The Journal de Montreal said Northwest had also asked Brazilian jet maker Embraer SA to prepare an offer on its own regional jet.
Bombardier is the world's third-largest civil aircraft maker and the largest manufacturer of rail cars. Embraer is the world No. 4 civil aircraft maker.
The two companies have been locked in a dogfight for the burgeoning regional jet market, which Bombardier still dominates, and have traded accusations of illegal trade practices.
In what has threatened to become a trade war between Canada and Brazil, the World Trade Organization has twice upheld complaints by Canada that Brazilian export subsidies for Embraer aircraft are illegal under global trade rules.
The WTO's Dispute Settlement Body has authorized Canada to impose sanctions of $233.5 million a year over five to six years on Brazilian imports.
A WTO dispute settlement panel is examining a separate complaint by Brazil that Canada's low-interest financing to Bombardier clients such as Air Wisconsin is illegal.
Bombardier's class B shares rose 33 Canadian cents or 1.5 percent to C$22.89 in mid-morning trading in Toronto.
Bombardier was scheduled to release its first-quarter results later on Tuesday. The consensus estimate of seven analysts polled by Thomson Financial/First Call was for Bombardier to post a profit of 17 Canadian cents a share in the quarter, up from 14 Canadian cents a share a year earlier.