Bombardier shares fall as rival Embraer scoops big U.S. jet order

Thu Jan 24, 2013 2:48pm EST

A worker walks past the entrance to the Bombardier plant in Derby, central England, July 5, 2011. REUTERS/Darren Staples

A worker walks past the entrance to the Bombardier plant in Derby, central England, July 5, 2011.

Credit: Reuters/Darren Staples

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(Reuters) - Shares in Bombardier Inc (BBDb.TO) fell on Thursday on news that rival planemaker Embraer (EMBR3.SA) had landed a large order to supply regional jets in the U.S. market, traditionally a strong market for Bombardier.

Brazil's Embraer on Thursday clinched a deal worth up to $4 billion to supply larger regional jets for American Airlines' regional network.

Embraer and Republic Airways Holdings Inc (RJET.O) signed a contract for 47 E-175 jets, with an option to acquire an additional 47 aircraft. The new aircraft will be operated by Republic under AMR Corp's (AAMRQ.PK) American Eagle brand.

Although losing the deal is disappointing for Canadian-based Bombardier, Republic and Embraer have a long history together, making it difficult for Bombardier to displace the incumbent, PI Financial analyst Chris Murray said.

"It is not that there aren't other orders that we will still expect to see out of the U.S.," he said.

Other U.S. airlines that are considering renewing their regional fleets in the short- to medium-term are United Continental (UAL.N) and U.S. Airways Group Inc LCC.N. A senior executive at Embraer said on Thursday the company expects more demand from American Airlines even after the Republic order.

Shares in Bombardier fell as much as 2 percent on the Toronto Stock Exchange early on Thursday. By midday, the stock was down 4 Canadian cents, or 1 percent, at C$4.09, against the trend of an overall stronger market.

(Reporting by Nicole Mordant in Vancouver; editing by Matthew Lewis)

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Comments (1)
Jeepgirl wrote:
I refuse to fly in anything except Boeing aircraft anyway. I know one of those other companies is supposed to make the best fire-fighting plane for forest fires. The United States should be ordering some of those right now before another summer full of drought.

Jan 24, 2013 1:33pm EST  --  Report as abuse
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