* Delta orders up to 70 CRJ900s for as much as $3.3 bln
* Undisclosed Chinese customer also buys 7 regional jets
* Bombardier set to steal Embraer's sales lead in segment
By Brad Haynes and Karen Jacobs
Dec 6 Bombardier Inc won up to $3.6
billion in regional jet orders from Delta Air Lines and
an undisclosed Chinese client on Thursday, recovering momentum
in a segment that had slipped to Brazilian rival Embraer
Delta said it would buy 40 Bombardier CRJ900 regional jets,
with the option to buy an additional 30 planes, in a deal worth
up to $3.29 billion. L a ter on Thursday, Bombardier said a
Chinese customer had ordered seven CRJ700 jets in a $330 million
Together the orders reignited prospects for Bombardier's
aviation unit and dimmed hopes that Embraer, which was in the
running for the Delta deal, could keep up the pace of its
production next year.
Embraer shares fell as much as 7 percent in Thursday trading
before paring losses to 2.7 percent, while Bombardier shares
gained 1.8 percent.
Bombardier has delivered about half as many regional jets as
Embraer in recent years and missed out on several major orders,
especially in China where Embraer has delivered three in four
commercial jets with 120 seats or less.
This year, however, Bombardier has booked more than 90
regional jet orders -- including Thursday's announcements --
compared to a net 12 new orders for Embraer through September.
The Delta deal, along with an historic $7.8 billion business
jet order from VistaJet last week, likely lifted Bombardier's
order backlog to more than $60 billion, according to Desjardins
analyst Benoit Poirier, from $54 billion at the end of 2011.
The order also marked the first shot in what may be an
ongoing battle next year to replenish an aging U.S. regional jet
fleet, including possible orders from SkyWest and AMR
Corp's American Airlines, Poirier told clients in a
Without new commercial jet orders by early 2013, Embraer's
Chief Executive Frederico Curado said last month that the
company would not be able to maintain stable E-Jet output next
year, as its order backlog hit a six-year low on thin demand.
Curado said that Delta was the airline most likely to make a big
regional jet order this year.
RENEWING REGIONAL FLEET
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.
The order for the two-class, 76-seat CRJ900 comes as Delta,
the No. 2 airline behind United Continental, moves to
retire 50-seat jets that cost more to operate. The 40 firm
orders were valued at $1.85 billion, with that rising to $3.29
billion if all 30 options are exercised.
Delta said on Thursday it expects to start taking delivery
of the Bombardier and Boeing planes in the second half of 2013.
Earlier this year, Delta 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.
Shares of Delta were up 2.4 percent on the New York Stock
Exchange in afternoon trading.