Bombardier/Embraer Share In $4.3 Billion Order

US Airways has split an order for a minimum 170 regional jets between Bombardier and Embraer for 50- and 70-seat aircraft. The total value of the order is $4.3 billion, and does not include options for 380 aircraft. The order is part of US Airways' business recovery plan that allowed it to emerge from bankruptcy protection last month.

The Bombardier order includes 60 CRJ200s and 25 CRJ700s, with a total value of $2.2 billion. It also includes 90 reconfirmable orders. This puts in place a scheduled delivery date for those aircraft, but allows US Airways to cancel the order within a specific time frame if the aircraft are not needed. Options were also placed on an additional 100 aircraft that can be a mixture of CRJ200s and CRJ700s to provide the airline flexibility in meeting its fleet needs. The potential total value of the Bombardier firm order and options is $7 billion.

US Airways has ordered the CRJ700 Series 705, which is essentially a CRJ900 with reduced seating. It is powered by the same engine as the 900, the General Electric CF34-8C5 producing 13,123 pounds of thrust at takeoff, compared to the 12,670 pounds of thrust for the 70-seat CRJ700 Series 701.

While the CRJ900 is certified for 86 passengers, compared to 75 for the CRJ700 Series 705, both aircraft have the same physical dimensions. The Series 705 has a maximum takeoff weight of 79,500 pounds compared to 80,500 pounds for the CRJ900. Extended range versions of both aircraft have a maximum takeoff weight of 82,500 pounds. Maximum payload for the Series 705 is 22,900 pounds, compared to 18,800 pounds for the Series 701. Payload for the CRJ900 is 22,500 pounds.

Initial deliveries of the Bombardier aircraft will begin late this year, with the final aircraft delivered by the second quarter of 2005.

Embraer has received from US Airways an order for 85 of its 70-passenger 170 RJs, making US Airways the first North American carrier to order the 170. Deliveries are scheduled to begin this November, with all aircraft delivered by September 2006. US Airways has the option to convert any of its 170s to the slightly larger 76-seat Embraer 175. The airline placed options on 50 additional 170s plus 140 ERJ-145s. The firm order for the 170s was valued at $2.1 billion. Total value of the contract will be $6.2 billion if all the options are converted to firm orders.

Of the 85 Embraer 170s ordered, 55 will come directly from Embraer and 30 will come from General Electric Capital Aviation Services (GECAS). GECAS had ordered 50 Embraer 170s in 2000.

US Airways official David Castleveter told C/R News that the Embraer 170 aircraft will be delivered to MidAtlantic Airways, a division of US Airways. The Bombardier aircraft will be going to the US Airways Express carriers, with the first CRJ 200 going to PSA Airlines, a wholly owned subsidiary of US Airways.

US Airways President and CEO David Siegel said that the new RJs would allow the carrier to grow its network and compete "more vigorously" in short-to-medium haul markets. "The RJs will also enable us to increase hub feed by adding new markets that were too distant for turboprop aircraft and replace turboprop flying, which will please many customers who prefer jet aircraft." The RJs will also allow the carrier to replace and complement the larger aircraft on routes with poor to marginal performance, "which then can be re-deployed to operate in more profitable destinations, such as the Caribbean and on other routes where we currently do not fly."

>>Contacts: US Airways, David Castelveter, tele: 703-872-5116, e-mail: dac@usairways.com; Bombardier, Bert Cruickshank, tele: 416-375-3546, e-mail: bcruickshank@dehavilland.com; Embraer, Doug Oliver, tele: 954-359-3414, e-mail: doliver@embraer.com<<