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SkyWest picks Embraer over Bombardier for new jet order

An employee works on the jet assembly line at the Embraer headquarters in Sao Jose dos Campos, 100 km from Sao Paulo May 14 2013.


Bombardier Inc. has once again lost out on a huge regional-jet order from SkyWest Inc., a U.S. carrier that has in the past been a loyal customer of the aerospace giant.

Bombardier's Brazilian rival Embraer SA said on Tuesday it has clinched a deal with SkyWest as many as 200 regional jets; total value of the order could reach $8.3-billion (U.S.).

St-George, Utah-based commuter airline SkyWest said it plans to initially purchase 40 of Embraer's 76-seat E175 aircraft.

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The planes from that firm order are to be flown for United Airlines.

Another 60 orders could be forthcoming if SkyWest reaches agreements with other major airlines to operate the planes, SkyWest said in a news release.

A deal for 100 aircraft would be worth about $4.1-billion, based on the list price for the E175, Embraer said in a separate statement.

An option for another 100 E175s has been signed, which would boost the total value of the deal to $8.3-billion. However, it is common practice for aerospace companies to provide discounts to airlines.

Last year, Bombardier also lost a big SkyWest regional-jet contract when it was announced that Mitsubishi Aircraft Corp. had signed an agreement to sell 100 planes to the airline.

That deal was valued at $4.2-billion.

Bombardier Aerospace spokesman Marc Duchesne said in an interview that the North American regional-jet market is highly dependent on the decisions the legacy airlines make because of agreements they have struck with the commuter companies. In the case of SkyWest, the fact that United has a large fleet of Embraer jets no doubt played a role in SkyWest's opting for Embraer product, he said.

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"United was looking for commonality between fleets," he said.

Mr. Duchesne pointed to the large order Bombardier received from Delta Air Lines Inc. last December for 40 CRJ900s valued at $1.85-billion.

Delta also took options on 30 more aircraft which – if converted to firm orders – would make for a total value of $3.29-billion for 70 jets.

Bombardier sales of regional jets had been in a slump for several years before the Delta announcement came along.

Delta is also a long-time Bombardier customer.

In a cost-cutting move, United, Delta and American Airlines have all worked out agreements with their pilots that allow the carriers to place bigger aircraft with their regional partners.

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Mr. Duchesne said Bombardier remains in the running for "a significant number of potential [regional jet] orders.

"Regional airlines are looking for new, efficient and passenger-friendly regional jets," he said.

"We're still projecting that a significant number of regional jet orders are to be had in the North American market."

He added that SkyWest remains a major Bombardier customer, with more than 280 Bombardier regional jets in its fleet.

Besides regional jets, Bombardier is attempting to crack the market for bigger commercial aircraft with its new C Series jet in the 100-to-149-seat category now dominated by Boeing Co. and Airbus SAS.

First flight of the C Series is scheduled for later next month.

Over the years, Bombardier has sold a total of 425 regional jets to SkyWest.

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About the Author
Quebec Business Correspondent

Bertrand has been covering Quebec business and finance since 2000. Before joining The Globe and Mail in 2000, he was the Toronto-based national business correspondent for Southam News. He has a B.A. from McGill University and a Bachelor of Applied Arts from Ryerson. More


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