NetJets to buy up to US$9.6 billion in Bombardier jets, services

Purchase deal includes up to 275 Bombardier Challenger business jets.

June 12, 2012
by Canadian Press

MONTREAL: Bombardier Inc has inked a major deal with one of Warren Buffett’s companies, which is poised to buy up to US$9.6 billion in business jets and services if all options are exercised. Private jet company NetJets Inc signed the deal June 11 to buy up to 275 Bombardier Challenger business jets that could be worth up to US$7.3 billion. There are 100 firm orders and 175 options. Bombardier said it has also signed a 15-year service and maintenance agreement for the aircraft valued at as much as an additional US$2.3 billion.

“This purchase demonstrates our long-term planning and represents our ongoing commitment to providing unparalleled safety and service in aircraft uniquely customized for our owners,” NetJets chairman and CEO Jordan Hansell said. “We are confident that NetJets’ market leadership and strong foundation position us to make long-term investments in our business to differentiate our fleet in ways that no one else in the industry can.”

NetJets is a unit of Berkshire Hathaway Inc, the main company of billionaire investor Warren Buffett. The deal includes 75 firm orders and 125 options for the Challenger 300 Series aircraft as well as 25 firm orders and 50 options for the larger Challenger 605 Series aircraft. The firm orders are worth $2.6 billion based on 2012 list prices. The order follows a deal earlier this year that saw NetJets order up to 120 of Bombardier’s Global business jets in a deal worth up to US$6.7 billion. Along with the Bombardier order, NetJets has placed an order for 150 Cessna Citation Latitudes, including 25 firm orders and options for 125 more, with deliveries beginning in 2016.