US Airways places jet orders with Bombardier, Embraer

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US Airways places jet orders with Bombardier, Embraer

ARLINGTON, Va. (AP) =97 US Airways signed deals with two jet-plane=20
manufacturers to buy at least 170 and possibly as many as 550 regional jets=
=20
from Canada-based Bombardier Aerospace and Brazil-based Embraer. The deal=20
includes $4.3 billion in firm orders for 85 Bombardier jets and 85 Embraer=
=20
jets. The regional jets are a linchpin of US Airways' restructuring plan,=20
replacing unpopular turboprop planes on short routes and more expensive=20
mainline jets on larger routes. The airline believes the regional jets will=
=20
allow it to generate more revenue and compete more effectively. "Regional=20
jets will allow us to replace and complement larger jet aircraft on routes=
=20
with poor to marginal performance, which then can be redeployed to operate=
=20
in more profitable destinations," said David Siegel, president and chief=20
executive officer of the Arlington, Va.-based airline. Bombardier Aerospace=
=20
said Monday the agreement includes 60 firm orders for its 50-seat regional=
=20
jet and 25 firm orders for its 75-seat model.

Of the 85 firm orders, 36 were previously placed by GE Capital Aviation=20
Services and committed to US Airways. The net effect increases Bombardier's=
=20
order backlog by 49 aircraft. Bombardier said deliveries will start in the=
=20
fourth quarter of 2003 and continue through the second quarter of 2005. The=
=20
Embraer order includes 85 Embraer 170 planes, with 70 seats each. The=20
airline has the option, though, of converting the order to 76-seat Embraer=
=20
175 planes if it wishes. All the Embraer deliveries will be made by=20
September 2006. The Bombardier deal includes 90 reconfirmable orders, which=
=20
have scheduled delivery dates but allow the customer to cancel within a=20
specified deadline. In addition, the agreement includes 100 options to buy=
=20
a variety of Bombardier regional jets. Steven Ridolfi, president of=20
Bombardier Regional Aircraft, said US Airways' decision to acquire the=20
Bombardier CRJ200 and CRJ700 regional jets endorses the viability and=20
economics of the smaller jetliners.

US Airways recently reported a profit of $1.63 billion in the first quarter=
=20
of 2003, due to a $1 billion government-backed loan it received when it=20
emerged from bankruptcy on March 31. The airline also received a $240=20
million investment from the Retirement Systems of Alabama, a pension fund=20
for government workers that is now the carrier's largest shareholder. That=
=20
money, and other one-time items associated with the bankruptcy=20
organization, allowed the seventh-largest U.S. airline to record its profit=
=20
on operating revenue of $1.53 billion. Excluding one-time items, the=20
airline lost $282 million for the quarter, compared to a $269 million loss=
=20
on revenue of $1.71 billion in the year-ago quarter. The company said=20
reduced demand from the war in Iraq, as well as a Presidents' Day weekend=20
blizzard that paralyzed East Coast travel, hurt the bottom line.


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