Delta orders up to 70 Bombardier regional jets
BY JOSHUA FREED Associated Press
Friday, December 07, 2012
12/07/12 at 4:49 AM
MINNEAPOLIS - Delta Air Lines Inc. is ordering up to 70 regional jets from Bombardier as part of a major shift in the planes it uses for hauling passengers around the U.S.
Atlanta-based Delta announced a firm order for 40 of the CRJ900 planes on Thursday and options for 30 more. The deal would be worth $3.29 billion at list prices if Delta exercises the options, although discounts on such a big order are common.
The new planes are part of Delta's shift toward larger jets. They'll have 76 seats, making them smaller than Delta's mainline planes but larger than other regional jets. The new planes also have first-class sections, allowing Delta to sell more seats at higher prices.
They'll replace 50-seat jets currently flown on Delta's behalf by regional airlines. Those 50-seaters have become unprofitable at higher fuel prices, and none of Delta's 50-seaters have first-class sections.
Like other regional jets, the new planes will be flown by a regional partner on Delta's behalf. The first of the new planes begin arriving late next year.
Delta is moving away from 50-seat and smaller regional jets. The airline has said it believes passengers prefer larger planes, especially on longer flights. In June, Delta pilots approved a new union contract that allows it to expand flying by large regional jets in exchange for phasing out more 50-seaters.
Delta already has 101 CRJ-900s flown by Pinnacle Airlines Corp., SkyWest Inc. and SkyWest's ExpressJet unit. Those same airlines also fly the 50-seat CRJ-200s that Delta is in effect trading in to Bombardier for the new planes.
Delta spokesman Anthony Black said it isn't known yet which regional airline will fly the new planes, or which ones will be losing the 50-seaters. Delta will still have 226 of those CRJ-200s, even after it sends 60 back to Bombardier.
Delta also has another 154 larger regional jets that have first-class seats.
Delta said this fall that it was looking for 76-seat regional jets. It's a big win for Montreal-based Bombardier Inc., whose small-jet and regional jet business has been in the doldrums as other airlines also shift away from 50-seaters.
Original Print Headline: Bombardier gets Delta order
Embraer stock falls after Delta announcement
Shares of Embraer SA fell 3.3 percent Thursday after Delta Air Lines Inc. said it agreed to buy as many as 70 regional jets from Montreal-based Bombardier Inc.
Embraer, based in Sao Jose Dos Campos, Brazil, is the world's fourth-largest planemaker and a major manufacturer of regional jets.
"It's indeed a big contract, and the better things get for Bombardier, the worse it will be for Embraer," Luis Gustavo Pereira, an analyst at Futura Corretora in Sao Paulo, Brazil, said in a telephone interview. "A deal like this one makes people less confident about Embraer's capacity to keep up with competition."
- from bloomberg news
A flight attendant walks through a Bombardier CRJ900 regional jet. Delta Air Lines Inc. said Thursday it is ordering up to 70 of the planes from Montreal-based Bombardier. Bloomberg file