NYTimes.com Article: Air Canada Buys $1.35 Bln of Embraer Jets

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Air Canada Buys $1.35 Bln of Embraer Jets

September 29, 2004
 By REUTERS





Filed at 3:20 p.m. ET

MONTREAL (Reuters) - Air Canada (AC.TO) (ACErv.TO) has
agreed to buy 45 regional jets from Embraer SA (EMBR4.SA),
an order the Brazilian aircraft manufacturer valued on
Wednesday at $1.35 billion.

Empresa Brasileira de Aeronautica (Embraer) said the firm
order is for its Embraer-190 aircraft, configured for 93
seats. The value of the deal could top $2.7 billion if Air
Canada exercises options for another 45 jets, Embraer said.


The deal hinges on Air Canada's expected emergence on
Thursday from 18 months of bankruptcy protection. Shares in
the restructured airline are slated to begin trading in
Toronto on Monday.

The Montreal-based airline got court protection from
creditors on April 1, 2003, after sagging under about C$13
billion of debt and obligations.

It expects to emerge from protection as a much leaner and
profitable airline, but there remains skepticism among some
analysts about whether the restructured carrier can thrive
in the increasingly competitive air travel industry.

One example of concern is US Airways (UAIRQ.PK), which on
Sept. 12 entered bankruptcy protection for the second time
in two years.

``It's a different dog, same fleas,'' said one analyst who
declined to be identified.

Deliveries of the Embraer jets are expected to begin in
November 2005.

The Embraer order was widely expected and is part of a
program unveiled late last year by Air Canada to buy 105
small jets, the airline said.

``It's always positive to have a confirmation, although I
think the majority of the market, me included, were already
counting on that order since December 2003 when the
intention was announced,'' said Alexandre Garcia, an
analyst at Espirito Santo Securities, a brokerage in Rio de
Janeiro.

On Monday, Air Canada said it agreed to buy 30 regional
jets from Bombardier Inc. (BBDb.TO), in a contract valued
at $821 million, but that order fell 15 jets short of what
had been announced in the December plan.

Air Canada said on Wednesday that it expects to make
further announcements on the remaining aircraft to be
acquired under its plan.

http://www.nytimes.com/reuters/business/business-airlines-aircanada.html?ex=1097553374&ei=1&en=a7872750ab8e8bf5


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