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UPDATE 2-Bombardier cancels order for 15 jets from MyAir

Published 08/11/2009, 01:54 PM

* Orders were for CRJ1000 regional jets

* Italy's MyAir.com recently had license suspended

* Bombardier stock down 5.3 percent on TSX (Updates share price, adds analyst's comments)

TORONTO, Aug 11 (Reuters) - Bombardier Inc said on Tuesday it has canceled its deal to supply Italian low-cost carrier MyAir.com with 15 CRJ1000 regional jets.

Bombardier said the decision was made because MyAir, which recently had its license suspended by Italian aviation authorities as a result of financial difficulties, is facing "an uncertain situation". Four CRJ900 aircraft have been delivered to the airline, the Montreal-based company said.

Shares of Bombardier were down 23 Canadian cents, or 5.3 percent, at C$4.10 on the Toronto Stock Exchange on Tuesday afternoon.

Benoit Poirier, an analyst at Desjardins Securities, said Bombardier's share price had already discounted the troubled status of MyAir and the possibility of an order cancellation.

We "do not expect Bombardier to react materially to the news, as the CRJ1000 is a relatively small program for the company," Poirier said in a note to clients.

Bombardier, the world's No. 3 civil aircraft manufacturer, said it still has 49 firm orders for the CRJ1000 NextGen jetliner.

Poirier said Bombardier does not expect the order termination to have an impact on its production rate, as it had already taken into account MyAir's difficulties.

Bombardier's CRJ backlog, which includes the CRJ700, 900, and 1000, now represents about 2-1/2 years of production, he said.

Bombardier forecasts about 400 CRJ1000 deliveries over 20 years.

The airline industry has suffered a sharp slowdown during the recession. Bombardier announced in April it would lay off 3,000 employees to adjust to the falling demand for new aircraft. Those layoffs came on top of nearly 1,400 job cuts earlier in the year.

($1=$1.10 Canadian) (Reporting by John McCrank; editing by Peter Galloway)

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