Hot off the press.... Includes 85 firm orders (with first delivery in the Fall) for the 70-seat Embraer 170 aircraft - looks like a mini-Airbus...
Great news for the USAirways furloughees....
Good luck to all involved!
Reuters
US Airways Places $4.3 Billion Jet Order
Monday May 12, 2:28 pm ET
NEW YORK (Reuters) - US Airways Group Inc., which recently emerged from bankruptcy, kick-started expansion of its regional jet fleet on Monday by splitting a $4.3 billion order for at least 170 regional jets between Canada's Bombardier Inc.(Toronto:BBDb.TO - News) and Brazil's Embraer SA (Sao Paolo:EMBR4.SA - News).
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The deal, which also includes options to purchase another 380 aircraft, is part of US Airways' post-Chapter 11 strategy to expand its network by using smaller regional jets to develop short- and medium-range routes, US Airways chief executive David Siegel said in a written statement.
Arlington, Virginia-based US Airways, the nation's seventh largest air carrier, emerged from bankruptcy protection at the end of March. It plans to boost its regional jet fleet, which now holds 84 planes, up to as many as 465 aircraft, and will replace its turboprop airplanes with the new jets.
Regional jets are cheaper to operate than bigger aircraft, and can pull in profits in small markets that cannot fill large planes. Many of the major U.S. airlines have said they plan to increase use of regional jets to help eventually turn their huge financial losses into profits.
US Airways, which cut the size of its jet fleet by one-third as it restructured, had previously said it planned to order 50 50-seat regional jets and 50 70-seat regional jets from either maker, with options to buy another 100 of each.
The regional jet orders come as the airline industry faces an historic downturn that has forced some of the leading air carriers to delay deliveries for large planes because there is not enough demand to fill seats.
But low-cost airline JetBlue Airways (NasdaqNM:JBLU - News), which has reported profits despite the slump, ordered 65 large planes from European maker Airbus in April, with options for 50 more.
TESTING THE EQUIPMENT
The Bombardier agreement includes firm orders for 60 CRJ-200 50-seat planes, which are scheduled to be delivered beginning in October, as well as firm orders for 25 CRJ-700 75-seat jets.
Delivery for the other part of the deal -- firm orders for 85 Embraer 170 70-seat aircraft -- will start in November, Embraer said.
US Airways is the first carrier in North America to order the Embraer 170, part of a new family of Embraer jets designed to tap the gap between 50-seat regional jets and larger jets with more than 120 seats.
The airline split its firm aircraft orders evenly between Embraer and Bombardier, but it may choose to favor one of the aircraft makers more heavily than the other if it exercises options to buy more jets.
Financing has been arranged for more than 80 percent of the planes on order at "highly competitive market rates," US Airways spokesman David Castelveter said. He declined to comment on whether the airline was given a discount on the orders, but he said the deal involved "an outstanding financial package."
Splitting the order between Embraer and Bombardier, which competed fiercely for the business, lets US Airways take delivery more quickly on the planes.
Embraer, the world's fourth biggest manufacturer of civilian aircraft, has cut its forecast for jet deliveries in 2003 twice since the start of the year due to an order cancellation from Swiss International Air Lines (Zurich:SWIn.S - News) in March and an order delay by top client ExpressJet Holdings Inc. (NYSE:XJT - News) in February.
Regional carrier Atlantic Coast Airlines asked Bombardier last month to delay deliveries of regional jets it ordered.
Embraer said the total value of its portion of the US Airways' contract is $2.1 billion, with a potential value of more than $6.2 billion if options are converted to purchases.
Great news for the USAirways furloughees....
Good luck to all involved!
Reuters
US Airways Places $4.3 Billion Jet Order
Monday May 12, 2:28 pm ET
NEW YORK (Reuters) - US Airways Group Inc., which recently emerged from bankruptcy, kick-started expansion of its regional jet fleet on Monday by splitting a $4.3 billion order for at least 170 regional jets between Canada's Bombardier Inc.(Toronto:BBDb.TO - News) and Brazil's Embraer SA (Sao Paolo:EMBR4.SA - News).
ADVERTISEMENT
The deal, which also includes options to purchase another 380 aircraft, is part of US Airways' post-Chapter 11 strategy to expand its network by using smaller regional jets to develop short- and medium-range routes, US Airways chief executive David Siegel said in a written statement.
Arlington, Virginia-based US Airways, the nation's seventh largest air carrier, emerged from bankruptcy protection at the end of March. It plans to boost its regional jet fleet, which now holds 84 planes, up to as many as 465 aircraft, and will replace its turboprop airplanes with the new jets.
Regional jets are cheaper to operate than bigger aircraft, and can pull in profits in small markets that cannot fill large planes. Many of the major U.S. airlines have said they plan to increase use of regional jets to help eventually turn their huge financial losses into profits.
US Airways, which cut the size of its jet fleet by one-third as it restructured, had previously said it planned to order 50 50-seat regional jets and 50 70-seat regional jets from either maker, with options to buy another 100 of each.
The regional jet orders come as the airline industry faces an historic downturn that has forced some of the leading air carriers to delay deliveries for large planes because there is not enough demand to fill seats.
But low-cost airline JetBlue Airways (NasdaqNM:JBLU - News), which has reported profits despite the slump, ordered 65 large planes from European maker Airbus in April, with options for 50 more.
TESTING THE EQUIPMENT
The Bombardier agreement includes firm orders for 60 CRJ-200 50-seat planes, which are scheduled to be delivered beginning in October, as well as firm orders for 25 CRJ-700 75-seat jets.
Delivery for the other part of the deal -- firm orders for 85 Embraer 170 70-seat aircraft -- will start in November, Embraer said.
US Airways is the first carrier in North America to order the Embraer 170, part of a new family of Embraer jets designed to tap the gap between 50-seat regional jets and larger jets with more than 120 seats.
The airline split its firm aircraft orders evenly between Embraer and Bombardier, but it may choose to favor one of the aircraft makers more heavily than the other if it exercises options to buy more jets.
Financing has been arranged for more than 80 percent of the planes on order at "highly competitive market rates," US Airways spokesman David Castelveter said. He declined to comment on whether the airline was given a discount on the orders, but he said the deal involved "an outstanding financial package."
Splitting the order between Embraer and Bombardier, which competed fiercely for the business, lets US Airways take delivery more quickly on the planes.
Embraer, the world's fourth biggest manufacturer of civilian aircraft, has cut its forecast for jet deliveries in 2003 twice since the start of the year due to an order cancellation from Swiss International Air Lines (Zurich:SWIn.S - News) in March and an order delay by top client ExpressJet Holdings Inc. (NYSE:XJT - News) in February.
Regional carrier Atlantic Coast Airlines asked Bombardier last month to delay deliveries of regional jets it ordered.
Embraer said the total value of its portion of the US Airways' contract is $2.1 billion, with a potential value of more than $6.2 billion if options are converted to purchases.
