* Carrier orders 60 jets from Embraer, 30 from Bombardier
* American goes from "one of oldest fleets to one of newest"
* Embraer sees 2014 as "good year" for commercial jet sales
(Combines Embraer and Bombardier details, adds analyst comment,
details on fleet upgrade)
Dec 12 American Airlines Group Inc said
on Thursday it ordered 90 regional jets from Embraer SA
and Bombardier Inc in deals worth about $4
billion at list prices as it upgrades to a more efficient fleet
to lower operating costs.
The new carrier, formed when AMR Corp and US Airways
completed a merger this week, is buying 60 Embraer E175 planes
valued at $2.5 billion, and 30 Bombardier CRJ900 NextGen planes
worth about $1.42 billion.
American has options for an additional 40 Bombardier jets
and another 90 Embraer planes.
If all of the options are exercised, the total deal value
could top $9 billion.
Shares of Brazil's Embraer were up 1.2 percent, while
Canada's Bombardier was about flat in Toronto trading. American
Airlines fell 1 percent to $25.75 in Nasdaq trading.
After the American announcement, Embraer said it expected a
"good year" for commercial jet sales in 2014, with Eastern
Europe and Russia among the most promising regions for new
Paulo Cesar de Souza e Silva, Embraer's head of commercial
aviation, said he expects commercial jet deliveries in the
coming years to be in line with or even better than in 2013.
This year was an especially strong year as the company secured
more than 300 firm orders for its regional E-Jets.
"We have the challenge of delivering the planes (sold this
year). We've really filled up our production line for the coming
years," Silva said in a telephone interview.
Embraer's next-generation investments and aggressive sales
efforts have helped it dominate the market this year for
regional jets that seat about 75 passengers, while Bombardier
has bet the future of its civil aviation unit on the larger
The Bombardier order was the Canadian manufacturer's biggest
deal with a major airline since one from Delta Air Lines Inc
a year ago.
The Bombardier CRJ900 has a range of 1,048 to 1,515 nautical
miles, while the Embraer E175 has a range of up to 2,000
nautical miles, according to the websites of the manufacturers.
American's new regional jet orders come on top of hundreds
of other airplanes that the carrier plans to add over the next
few years as part of a major fleet upgrade.
The company is taking delivery of at least 59 new planes
this year, including the Boeing widebody 777-300ER,
narrowbody Boeing 737-800 as well as the Airbus A319
and A321. American also expects to take delivery of the new
Boeing 787 Dreamliner late next year.
American is "going to go from having one of the oldest
fleets to one of the relatively newest," said George Hamlin, an
aviation consultant in Fairfax, Virginia. "It's a game of
The carrier said the 76-seat regional jets it ordered will
replace smaller 50-seat aircraft that are being retired. The
Bombardier CRJ900s, which will be delivered starting in the
second quarter of 2014, will be operated by regional carrier PSA
Airlines, a unit of US Airways.
American said it will decide which of its regional carriers
will operate the Embraer planes at a later time. Deliveries will
begin in 2015.
American Airlines Group Chief Executive Doug Parker, former
CEO of US Airways, said earlier this week that American and US
Airways didn't anticipate placing additional sizeable jet orders
for mainline operations in the near future.
"We have enough aircraft on order," Parker told Reuters in
an interview from Dallas on Tuesday.
US Airways and American must operate separately until they
obtain a single operating certificate from the U.S. government.
An agreement with its pilots union, reached while American
was restructuring in bankruptcy, gives the carrier flexibility
to order large regional jets and to contract with regional
Earlier this year, American unveiled an updated look for its
planes as well as a new logo - the first overhaul of the
exterior in more than 40 years. The planes are a silver mica
color, and the tail has red, white and blue stripes.
(Reporting by Karen Jacobs in Atlanta, Brad Haynes, Cesar
Bianconi and Todd Benson in Sao Paulo, and Euan Rocha in
Toronto; Editing by Lisa Von Ahn and Jeffrey Benkoe)