Alaska Airlines reportedly will order 30 regional jets made by Embraer of Brazil, with options to buy 30 more. The firm order for E175 jets is worth about $876 million after standard industry discounts, and represents a win for Embraer over Bombardier of Canada.
Alaska Airlines has chosen the E175 made by Embraer of Brazil for its pending order of 30 regional jets, the Wall Street Journal reported Monday afternoon.
It also has purchase options to take 30 more on similar terms, the Journal said.
The firm order is worth $1.3 billion at list prices. However, market data from aircraft valuation firm Avitas pegs the real price after standard industry discounts at about $876 million.
Alaska Airlines management said in an earnings conference call three weeks ago that the company was “in the final phase” of making a deal and would “place an order for 30 large regional jets in the first quarter of 2016, with deliveries starting in 2017.”
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These are smaller commercial jets — with four-abreast cabins seating 76 passengers — flown by Alaska subsidiary Horizon Air. The contenders for the order were Embraer’s E175 and the CRJ900, made by Bombardier of Canada.
Embraer’s win is a blow to Bombardier, which ran into serious financial trouble developing its larger CSeries jet. Now its smaller aircraft are being supplanted at Alaska, where it has in the past supplied CRJ700 jets and Q400 turboprops.
Alaska chief financial officer Brandon Pedersen explained in the earnings call that the new regional jet order is partly to expand the fleet and partly “to replace 15 Q400s that are scheduled for lease return in 2018.”
Even before this new order, Alaska had said it would be replacing its remaining eight CRJ700s with E175s and announced plans to grow the number of E175s to 23 by the end of 2017. The expected new order would further expand the E175 fleet.
Alaska Airlines spokeswoman Bobbie Egan said “no final decision has been made, no documents have been signed and our board of directors has not approved any new jet purchase.”
The Journal reported that the deal with Embraer is expected to be approved at an Alaska Air board meeting Wednesday.
At the beginning of this year, Alaska Air Group’s fleet consisted of 147 Boeing 737s, five Embraer E175s, 52 Bombardier Q400s, and in addition the eight Bombardier CRJ-700s, which are operated by SkyWest on Alaska’s behalf.