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Canada's Bombardier signs $230 million deal with Air Kazakhstan

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Air Kazakhstan will begin flying the first of 10 Bombardier Q400 NGs in March 2015, with a $230 million price tag on the aircraft/operations deal, the Air Transport World said, reports.

Bombardier’s director of business development and sales in Russia and the CIS, Mark Gilbert, said initial pilot training will be carried out in Canada, and that expatriate staff would establish the operation, “but the whole idea is that the Air Kazakhstan company is managed by officials from Kazakhstan,” he said.

“We think, during the first year, the crew will be formed from local personnel,” Air Kazakhstan president Nurjan Shakirov said.

The aircraft have been “adapted to Central Asia, and tested in 50-degree frost and 50-degree heat” to ensure its suitability for the central Asian republic’s extreme weather conditions, added Shakirov. This has been an issue for some operators that have seen problems with Embraer aircraft suffering icing downtime and associated low-temperature operational problems.

Although the ticket price of the 10 aircraft is closer to $300 million—and Bombardier will also be offering pilot and technician training and some MRO capability—the company will be looking beyond a simple turboprop deal.
The airline is a JV between Bombardier and Kazakhstan’s Samruk-Kazyna wealth fund. The Kazakhstan government is keen to tap into Bombardier’s expertise across the wider transport spectrum as it develops the country’s infrastructure. That includes Bombardier’s ability to supply and engineer new rail routes and rolling stock.

“In 2014-2016, Kazakhstan plans to inject its oil savings into the national economy, notably infrastructure projects to boost transit shipment and facilitate Kazakhstan’s exports to global markets,” Kazakhstan’s Economic Affairs Minister Erbolat Dossayev said. The country has a current National Oil Fund reserve of $94 billion.

This deal, together with Bombardier’s Canadian expertise in extreme weather operations, could see it establish a solid base in one of the more buoyant central Asian economies, which boasts significant oil and gas reserves—and potentially open a back door into more regional jet sales once the Q400 deliveries are completed.

July 11 2014, 10:35

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