Canadian business jet manufacturer Bombardier (TSX:BBD) has inked a memorandum of understanding (NASDAQ:MOU) with CDB Leasing Co, one of China’s leading leasing companies in a move to increase its market penetration into the rapidly expanding Chinese economy.
The fortunes of Bombardier’s business jets is closely linked to the spending habits of the super-rich and corporate jet market, so understandably it sees big potential to expand its business into emerging markets like China.
The MOU signed today envisages CDB Leasing offering pre-delivery payment financing, delivery financing and leasing solutions to customers interested in Bombardier’s range of private jets, including its CSeries jets, Q400 and CRJ aircraft. CDB Leasing is offering US$3.85 billion for domestic and international transactions of Bombardier aircraft.
"The financial resources of CLC put Bombardier in a stronger competitive position to recommend financing and leasing solutions for potential customers in China and elsewhere," said Gary R. Scott, President, Bombardier Commercial Aircraft.
Mairead Lavery, VP of Strategy and Business Development added that the MOU brought benefits to both companies in seeking ‘optimized aircraft solutions’.
In the 12 month period ended January 31, 2009, TSX listed Bombardier generated revenues of US$19.7 billion from its commercial aircraft, business jet and rail transportation operations.
Disclosure: The author holds no positions in the company