General Lee
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UPDATE 3-US Air bankruptcy to hit Brazil jet maker Embraer
Thu Sep 23, 2004 12:09 AM ET
(Adds comments on jobs)
SAO JOSE DOS CAMPOS, Brazil, Sept 22 (Reuters) - Brazilian regional jet maker Embraer (EMBR4.SA: Quote, Profile, Research) said on Wednesday it was "very probable" a bankruptcy filing by US Airways (UAIRQ.OB: Quote, Profile, Research) would force it to cut its target for plane deliveries this year.
"It is clear there will be an impact, it would be irresponsible to say otherwise," Embraer Chief Executive Mauricio Botelho said at the company's main factory in Sao Paulo state. "It is impossible to quantify the impact now."
Job cuts were a possibility, he said.
Botelho told a media conference his company hoped to have a clear position from US Airways within one to two months on how the bankruptcy filing would affect Embraer's planned delivery schedule of 160 planes this year and 170 next.
US Airways filed its second bankruptcy petition in two years last week.
US Airways is the principal buyer of the Embraer 170, a 70-seat plan that makes up part of a new line of regional jetplanes. Embraer hopes the new line will help it steal market share from Bombardier (BBDb.TO: Quote, Profile, Research) of Canada. The rivals are the world's largest commercial planemakers after Boeing and Airbus.
Some analysts believe the small, efficient planes supplied to US Airways by Embraer could help return the U.S. No 7 airline to profitability if they replace larger, costlier planes. Embraer has responded to the filing by halting deliveries to US Airways.
US Airways has received 22 of the latest Embraer 170 model this year and is slated to receive another 14 through December. For 2005, Embraer would deliver 30 planes to US Airways, followed by 19 in 2006 to fill out an 85-plane order made last year.
Embraer contracted hundreds of new employees in expectation of a 2004 recovery in orders to levels last seen prior to the September 11 attacks on the United States.
Botelho said it was possible the company might now have to cut jobs.
"I'm not ruling anything out, I don't know what's going to happen. At the moment it's necessary to have caution," he said.
Bye Bye--General Lee
Thu Sep 23, 2004 12:09 AM ET
(Adds comments on jobs)
SAO JOSE DOS CAMPOS, Brazil, Sept 22 (Reuters) - Brazilian regional jet maker Embraer (EMBR4.SA: Quote, Profile, Research) said on Wednesday it was "very probable" a bankruptcy filing by US Airways (UAIRQ.OB: Quote, Profile, Research) would force it to cut its target for plane deliveries this year.
"It is clear there will be an impact, it would be irresponsible to say otherwise," Embraer Chief Executive Mauricio Botelho said at the company's main factory in Sao Paulo state. "It is impossible to quantify the impact now."
Job cuts were a possibility, he said.
Botelho told a media conference his company hoped to have a clear position from US Airways within one to two months on how the bankruptcy filing would affect Embraer's planned delivery schedule of 160 planes this year and 170 next.
US Airways filed its second bankruptcy petition in two years last week.
US Airways is the principal buyer of the Embraer 170, a 70-seat plan that makes up part of a new line of regional jetplanes. Embraer hopes the new line will help it steal market share from Bombardier (BBDb.TO: Quote, Profile, Research) of Canada. The rivals are the world's largest commercial planemakers after Boeing and Airbus.
Some analysts believe the small, efficient planes supplied to US Airways by Embraer could help return the U.S. No 7 airline to profitability if they replace larger, costlier planes. Embraer has responded to the filing by halting deliveries to US Airways.
US Airways has received 22 of the latest Embraer 170 model this year and is slated to receive another 14 through December. For 2005, Embraer would deliver 30 planes to US Airways, followed by 19 in 2006 to fill out an 85-plane order made last year.
Embraer contracted hundreds of new employees in expectation of a 2004 recovery in orders to levels last seen prior to the September 11 attacks on the United States.
Botelho said it was possible the company might now have to cut jobs.
"I'm not ruling anything out, I don't know what's going to happen. At the moment it's necessary to have caution," he said.
Bye Bye--General Lee
