* Delta to replace 50-seater jets with 76-seater CRJ900
* Firm orders for 40 jets valued at $1.85 bln
* Embraer shares fall
Dec 6 Delta Air Lines said on Thursday
it would buy 40 Bombardier two-class regional jets,
with the option to buy an additional 30, in a deal valued at up
to $3.29 billion.
The order for the 76-seat CRJ900 aircraft comes as Delta,
the No. 2 airline behind United Continental, moves to
to retire smaller 50-seat jets that cost more to operate.
The orders were valued at $1.85 billion, with that rising to
$3.29 billion should the options be exercised, Bombardier said.
Shares of rival Brazilian jet maker Embraer SA
fell nearly 8 percent following the news. Delta had said in
October that it was considering Bombardier and Embraer jets for
Bombardier won its biggest jet deal of $7.8 billion from
Swiss charter operator VistaJet for up to 142 global aircraft
Delta's feeder carriers currently fly Bombardier 466 CRJ
The Canadian aircraft and train maker's stock is trading at
about 8 times analysts' expectations for 2012 earnings,
according to Thomson Reuters data. By contrast, Boeing is
at about 15 times forward earnings.
Bombardier shares were up 2 percent.
Benoit Poirier, a Desjardins analyst, said in a note to
clients that the Delta and VistaJet deals were expected to bring
Bombardier's regional aircraft backlog to a record level of more
than $60 billion by the end of the fourth quarter.
"Additionally, we believe there is further momentum ahead
for Bombardier's regional segments as Garuda (of Indonesia) is
expected to place a large order for turboprops," Poirier wrote
on Thursday. Longer term, he added, there could be opportunities
for orders from regional carrier SkyWest and AMR Corp's
American Airlines, which is currently restructuring
under Chapter 11 bankruptcy.
Atlanta-based Delta has taken a number of moves to revamp
its fleet used on U.S. routes with an eye to eliminating
less-efficient planes and adding more first-class cabins that
appeal to business passengers.
Earlier this year, it reached an agreement to add 88 Boeing
717-200 aircraft with 110 seats that are currently in use
by Southwest Airlines' AirTran unit. Last year, Delta
ordered 100 Boeing 737-900ER jets.
Delta said on Thursday it expects to start taking delivery
of the Bombardier and Boeing planes in the latter half of 2013.
Shares of Delta were up 2.1 percent at $9.92 on the New York
Stock Exchange in late morning trade.