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Onex, the Canadian buyout firm, could be a partner for Bombardier if the plane maker decides to build a new 110-to-130-seat passenger jet, an analyst said on Thursday.

Research Capital analyst Jacques Kavafian, who upgraded his stock recommendation and price target for Bombardier, published his theory hours before Bombardier said Delta Air Lines ordered 14 more of the company's 90-seat CRJ900 jets, a contract carrying a total value of some USD$511 million.

Kavafian said he thinks Bombardier will go ahead with its proposed CSeries airliner once it has found a financial partner for the USD$2 billion project.

The new airliner would take Bombardier beyond its regional jet and business jet sectors and into an aircraft market usually dominated by Boeing and Airbus.

«One possible partner that we believe could be involved is Onex, which has been active in the aerospace sector over the past couple of years,» Kavafian wrote in a research report.

Onex would have the financial capacity to join Bombardier because it recently announced a USD$1.1 billion secondary offering of shares in its Spirit Aerosystems Holdings unit, Kavafian said.

Kavafian expects Bombardier earnings from operations of 5 cents a share versus 1 cent a share a year earlier, with the improvement coming largely from stronger business jet sales.

Bombardier aircraft orders this year point toward signs of a rebound in the regional aircraft market, analysts said.

Kavafian estimated Bombardier has sold 130 aircraft in the first five months of this year, compared with 114 in all of 2006 and 94 in 2005.

In a research report this week, Tim James, analyst at CIBC World Markets, said he expects profit margin improvements in Bombardier's first quarter to stem from a product mix weighted more toward business jets and service revenues in aerospace and the train business.

(Reuters)