From: Reuters
Published March 10, 2008 04:31 AM

SAS inks compensation, aircraft deal with Bombardier

STOCKHOLM (Reuters) - Airline SAS <SAS.ST> said on Monday it had agreed with Canada's Bombardier <BBDb.TO> on compensation for problems with its fleet of Dash 8 Q400 aircraft and would order new planes from the Canadian firm.

The details of the deal, which also included landing gear maker Goodrich Corp <GR.N>, were confidential, but SAS said it would receive a total compensation of "slightly more than 1 billion Swedish crowns" ($164 million) in the form of a cash payment and credits for future aircraft orders.

The Scandinavian airline said its board had approved an order for 27 aircraft with an option for a further 24.

Three Bombardier-built Dash 8 Q400 turboprop planes operated by SAS crash-landed within weeks of each other last year.

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While no-one was hurt, the airline grounded the planes permanently and estimated that the problems would cost it 400 million crowns in the first quarter alone.

SAS slipped to a loss in the final quarter of last year, in part due to costs related to the Dash problems.

Under the deal between the airline and Bombardier, the world's third-biggest civil aircraft maker and largest manufacturer of trains, SAS placed orders for 13 CRJ900 NextGen jet liners, with a list price of $474 million, and 14 Q400 NextGen turboprop aircraft, with a list price of $356 million.

The planes would replace the Dash planes taken out of service last year as well as other aircraft in the group's fleet. It also agreed on options for another 17 CRJ900s and seven Q400s.

"Deliveries of the aircraft will be made successively in the next few years, commencing in the autumn of 2008 until 2011," the airline said.

(Reporting by Stockholm Newsroom; Editing by Erica Billingham)

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