SAKHIR, Bahrain -- Bombardier Aerospace has received a firm order for 16 of its new-generation CS300 jets for a Saudi Arabian airline, a deal worth about US$1.21 billion before options.

The value of the contract would increase to US$1.99 billion of the buyer exercises options to acquire another 10 CSeries planes.

The aircraft will be operated by SaudiGulf Airlines, a newly launched national carrier from the Kingdom of Saudi Arabia.

"We are thrilled that SaudiGulf Airlines, based in the largest Arab economy -- and one with an underserved air travel market -- will base the core of its business plan on the CSeries aircraft," said Bombardier Commercial Aircraft president Mike Arcamone.

The agreement with Al Qahtani Aviation company, signed in Bahrain, means that Montreal-based Bombardier (TSX:BBD.B) has firm orders for 198 CSeries planes plus nearly 250 options or commitments.

The CSeries is the company's newest line of passenger jets, currently undergoing test flights. It's expected to go into full production this year, after about 12 months of final testing.

SaudiGulf Airlines will operate domestic and international flights, with the international route network focusing on main capitals in the Middle East and Gulf as well as the Indian subcontinent.

SaudiGulf Airlines chairman Sheikh Tariq Al Qahtani said the company is "very excited about the CSeries aircraft's suitability for this market and the long-term success it will bring to the region."

He also said it is a "exciting time for the aviation industry" in the Arab states and neighbouring regions, with more than 54 million passengers moved through Saudi Arabia's 27 airports last year alone.