In a complex deal, Delta Air Lines [DAL] has hired Republic Airways [RJET] to fly 16 Embraer [ERJ] 170s as an expansion of its Delta Connection contract. As it orders the 70-seat RJs, Republic will be canceling an order for eight ERJ 145s which were to be flown for Delta. Eight planes, configured with two-cabins, will be delivered this year and another eight in 2006. Chautauqua Airlines, the Republic unit flying for Delta, will fly its 50-seat RJs for 3 percent less than what was called for in its original code-share agreement. The contract between the two has been extended from a termination in 2009 to 2016. The new jet order is in addition to the 23 Embraer 170s that Republic ordered for its United Express contract. Republic is the only independent U.S. regional flying the new Embraer RJ. Prior to its stock offering last spring, Delta was given nearly 3 million warrants to purchase Republic stock. In the new deal, Delta will be permitted to purchase up to 960,000 shares of Republic stock.
The Chinese government has cleared the Bombardier [BBD] CRJ 200. Civil aviation authorities had grounded all 28 CRJ 200s operating within the country following the Nov. 21 crash of a fully loaded plane on take-off. While the accident remains under investigation, the government said the three Chinese airlines flying the Canadian RJ were able to again fly the plane on Dec. 23.
The Chinese government also put the brakes on new aircraft sales to airlines in the world's most populous nation. There are 147 new airplanes - both regional and mainline - that are expected to be put into service this year by Chinese airlines. The General Administration of Civil Aviation said that in 2005 it will not approve of any new sales contracts for 2005 deliveries in an attempt to curb what it feels is an overheated market.
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