Bombardier to build 30 planes for Lufthansa in $1.9B deal

Bombardier Aerospace says it has reached a deal with Deutsch Lufthansa AG worth at least $1.92 billion for the Montreal-based company's new regional jet.

Canada's only aircraft maker said Wednesday it has signed a contract to build 30 CSeries model CS100 passenger aircraft for the German carrier. Lufthansa had made a provisional order for the planes, which carry 110 to 145 passengers, last year.

Bombardier said the deal also contains options for an additional 30 planes.

The announcement was welcome news after the company announced last month that it would have to lay off 4.5 per cent of its total workforce, or 1,350 people, due to slowing demand for its planes.

Investors applauded Wednesday's announcement, pushing Bombardier shares 10 per cent higher in trading on the Toronto Stock Exchange.

Bombardier shares jumped 28 cents to $2.87, a gain of 10.8 per cent.

The company values the deal at approximately $1.53 billion US based on the list price for 30 planes.

The aircraft will be operated by Lufthansa subsidiary Swiss International Air Lines Ltd.

"Our purchase agreement with Bombardier for CSeries aircraft is a renewal of Lufthansa's commitment to commercial success balanced by environmental and business policies oriented toward sustainability and passenger comfort," Nico Buchholz, Lufthansa's senior vice-president for corporate fleets, said in a release.

Bombardier expects to hire hundreds of people this year to work on the development of both the CSeries jet and the Learjet 85.

The company plans to add 175 people to the 850 people hired mostly last year. The workers will include non-unionized customer support, engineering operations and design engineering.

Thousands of union assembly workers, painters and other shop floor workers will be added starting the end of next year ahead of the aircraft's projected delivery in 2013.