American Airlines signs multi-billion dollar deal for 90 new jets

Posted on December 12, 2013

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Credit: American Airlines

Credit: American Airlines

Dec. 12 (UPI) — The newly-merged American Airlines company announced Thursday multibillion dollar contracts with Brazil’s Embraer and Canada’s Bombardier for 90 new 76-seat jets.

Embraer has seen a surge in U.S. plane sales, with more than 700 sold this year. American’s contract with Embraer is valued at $2.5 billion, with the purchase of 60 aircraft and the option to buy 90 more. Its contract with Bombardier is valued at $1.42 billion with the purchase of 30 aircraft and the option to buy 40 more. If American cashes in on the Bombardier options, the value could rise to $3.38 billion.

“Consistent with American’s Plan of Reorganization and Merger Agreement, these aircraft will provide much improved economics for the airline as they will replace smaller, less efficient 50-seat regional aircraft scheduled for retirement,” the company reported Tuesday.

Shares of the merged American Airlines Group went public this week. American Airlines had announced its merger earlier this year with US Airways to protect itself from bankruptcy. The stock price rose Thursday morning prior to trading along with the news. But it dipped nearly 1.5 percent Thursday morning after trading opened.

“Now that we’ve closed our merger with US Airways, we can deliver a top-tier regional product that offers a First Class cabin, Main Cabin Extra and in-flight Wi-Fi,” said Kenji Hashimoto, an American Airlines Group vice president, in a statement.

“These new regional jets are also a big win for our employees at our regional subsidiary, and will greatly improve economic efficiencies by lowering operating costs.”

Read more: http://www.upi.com/blog/2013/12/12/American-Airlines-signs-multi-billion-dollar-deal-for-90-new-jets/7101386868402/#ixzz2pYjmImq9

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