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Unrest in Ukraine could stall Russian Q400 deals

March 25, 2014 – The international crises over events in Crimea could affect Bombardier's efforts to finalize negotiations for a joint venture to build Q-400 turboprops in Russia, the manufacturer said Thursday.


March 25, 2014
By Winnipeg Free Press

March 25, 2014 – The international crises over events in Crimea could affect
Bombardier's efforts to finalize negotiations for a joint venture to
build Q-400 turboprops in Russia, the manufacturer said Thursday.

"With the Ukraine and everything that's
happening there, it's softened up a little bit the discussions but our
partner is still very eager to make that happen," aerospace president
Guy Hachey told an investor conference in New York.

 

Hachey didn't provide any details about the potential
impact the crisis might have on what he described as a "big opportunity"
for the aircraft.

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Russia is being targeted by western countries for its annexation of the Crimean peninsula.

 

On Thursday, President Barack Obama expanded
U.S. economic sanctions against Moscow, targeting 20 Russian officials
as well as a Russian bank that provides them support.

 

Obama also signed an executive order that would
allow the U.S. to penalize key sectors of the Russian economy, including
its huge energy business, if Russian forces move into other areas of
Ukraine.

 

The dispute with Russia is expected to dominate a
meeting next week of G7 leaders, which includes the U.S., Britain,
France, Germany, Italy, Japan and Canada.

 

Bombardier (TSX:BBD.B) said in
January that it was close to finalizing an agreement to establish a
joint venture with Rostec, a Russian state corporation, that could lead
to some 100 turboprops, valued at US$3.4 billion at list prices, being
built for the Russian market.

The final assembly line in Russia would
complement Bombardier's Toronto operations, where final assembly of the
70- to 80-seat turboprop currently take place.

 

Hachey told analysts that its efforts to sell
the plane in emerging markets is gaining traction in part due to the
introduction of an 86-seat version that will make it more financially
attractive for customers and challenge main rival ATR. | READ MORE