Bombardier Inc. is in negotiations with low-cost airline AirAsia Berhad on a deal that involves increasing the number of seats on its new C Series airplane to 160, as the aircraft maker tries to land orders with discount carriers.
Until now, the larger, CS300 version of the Bombardier plane had been offered with a maximum of 149 seats. But by shortening the distance between the seats – known as pitch – to 28 inches from 34 inches or lower, the Malaysia-based airline and other low-cost carriers can squeeze in more passengers.
"We think such an aircraft would have very attractive operating metrics and could prove to be a highly desirable configuration that could unlock additional orders," C. Scott Rattee, an analyst for Toronto-based Stonecap Securities Inc., said Monday.
The news about the negotiations came out of the British Grand Prix car race, where Bombardier chief executive officer Pierre Beaudoin met with his AirAsia counterpart Tony Fernandes. Mr. Fernandes owns the Caterham auto racing team. He also met with Mr. Beaudoin last spring and toured Bombardier facilities in Montreal.
"I was very impressed with Bombardier, especially Pierre," Mr. Fernandes said in an e-mail exchange with The Globe and Mail at the time.
On the weekend, Reuters news agency quoted Mr. Fernandes as saying: "We've got Pierre Beaudoin as a guest of mine. He's brought us a very interesting product for a 160-seat Bombardier and we're looking at that."
AirAsia is expanding rapidly from its Malaysian base and is an Airbus SAS customer when it comes to large commercial jetliners.
The airline placed one of the largest jet orders on record last year at the Paris Air Show when it signed up to buy 200 Airbus A320 planes with new, fuel-efficient engines.
AirAsia is in talks with Airbus for an additional 50 A320 planes.
The C Series is Bombardier's $3.4-billion program to leap into the large commercial airplane market that is dominated now by Airbus and Chicago-based Boeing Co.
The plane's first flight is scheduled to be made before the end of the year and delivery to customers by the end of 2013.
The Montreal-based transportation giant announced on Sunday that it had signed a conditional order with an unidentified airline for 15 C Series planes.
Firm orders stand at 138 and airlines have taken options and signed purchase rights and letters of intent on another 159. The deal announced Sunday would be worth about $1-billion (U.S.) at list prices and takes the total number of potential orders to 332.
A C Series order by AirAsia is probably a long shot, National Bank Financial analyst Cameron Doerksen said in a note to clients Monday.
"But clearly any new orders from a big-name airline would be very positive for Bombardier," Mr. Doerksen wrote. "While other orders for the C Series may be announced at Farnborough [Air Show in Britain], we believe first flight will likely be the next major catalyst for airlines to pull the trigger on ordering aircraft."