CHICAGO (Reuters) - US Airways Group Inc. (OTC BB:USALA.OB - News; NYSE:U - News), which recently emerged from bankruptcy, on Monday said it has placed a $4.3 billion order for at least 170 regional jets from Canada's Bombardier Inc. (Toronto:BBDb.TO - News) and Brazil's Embraer SA (Sao Paolo:EMBR3.SA - News).The deal, which also includes 380 options to purchase aircraft, is part of US Airways' post-Chapter 11 strategy of expanding its network by developing short- and medium-range routes using the smaller regional jets. Arlington, Virginia-based US Airways, the nation's seventh largest, emerged from bankruptcy protection in March.
"These new regional jets will enable US Airways to generate additional revenue by growing our route network and competing more vigorously in short-to-medium-length haul markets," US Airways Chief Executive David Siegel said in a statement.
US Airways had said previously that it planned to order 50 50-seat regional jets and 50 70-seat regional jets from either Bombardier or Embraer.
Its regional jet orders come as the airline industry faces a historic downturn that has forced other large carriers to delay deliveries for larger aircraft because there is not enough demand to fill planes.
The Bombardier agreement includes firm orders for 60 CRJ-200 50-seat planes, which are scheduled to be delivered beginning in October, as well as firm orders for 25 CRJ-700 75-seat jets.
Delivery for the other part of the deal -- firm orders for 85 Embraer 170 70-seat aircraft -- will start in November, Embraer said.
US Airways is the first carrier in North America to order the new Embraer 170, part of a new family of Embraer jets designed to tap the gap between 50-seat regional jets and larger jets with more than 120 seats.
Many of the Bombardier and Embraer jets will offer both first-class and coach service, with every seat either an aisle or window seat, US Airways said.
Embraer, the world's fourth biggest manufacturer of civilian aircraft, has cut its forecast for jet deliveries in 2003 twice since the start of the year due to an order cancellation from Swiss International Air Lines (Zurich:SWIn.S - News) in March and an order delay by top client ExpressJet Holdings Inc. (NYSE:XJT - News) in February. Houston-based ExpressJet operates as Continental Express.
Embraer said the total value of its portion of the US Airways' contract is $2.1 billion, with a potential value of more than $6.2 billion if options are converted to purchases.
"These new regional jets will enable US Airways to generate additional revenue by growing our route network and competing more vigorously in short-to-medium-length haul markets," US Airways Chief Executive David Siegel said in a statement.
US Airways had said previously that it planned to order 50 50-seat regional jets and 50 70-seat regional jets from either Bombardier or Embraer.
Its regional jet orders come as the airline industry faces a historic downturn that has forced other large carriers to delay deliveries for larger aircraft because there is not enough demand to fill planes.
The Bombardier agreement includes firm orders for 60 CRJ-200 50-seat planes, which are scheduled to be delivered beginning in October, as well as firm orders for 25 CRJ-700 75-seat jets.
Delivery for the other part of the deal -- firm orders for 85 Embraer 170 70-seat aircraft -- will start in November, Embraer said.
US Airways is the first carrier in North America to order the new Embraer 170, part of a new family of Embraer jets designed to tap the gap between 50-seat regional jets and larger jets with more than 120 seats.
Many of the Bombardier and Embraer jets will offer both first-class and coach service, with every seat either an aisle or window seat, US Airways said.
Embraer, the world's fourth biggest manufacturer of civilian aircraft, has cut its forecast for jet deliveries in 2003 twice since the start of the year due to an order cancellation from Swiss International Air Lines (Zurich:SWIn.S - News) in March and an order delay by top client ExpressJet Holdings Inc. (NYSE:XJT - News) in February. Houston-based ExpressJet operates as Continental Express.
Embraer said the total value of its portion of the US Airways' contract is $2.1 billion, with a potential value of more than $6.2 billion if options are converted to purchases.