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A $4bn deal with Republic Airways sends Embraer in the sky

Staff writer |
Embraer and Republic Airways Holdings announced a contract for 47 Embraer 175 jets with an option for an additional 47 aircraft. The deal worth $4 billion sent Embraer shares up 11 percent.

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Shares of Embraer went up more than 11 percent in Sao Paulo after the deal was announced. The new aircraft will be operated by Republic Airlines, a Republic subsidiary, under American Eagle brand in the American Airlines’ regional network. The deal is subject to court approval which is expected to occur in the first quarter of 2013. The E175 will be featured in a dual-class layout, seating up to 76 passengers and the first delivery is scheduled for mid-2013.

"It is significant that our long-time, valued customer Republic Airways – a true innovator in the regional transport business – is the first customer for the enhanced E175. It’s a perfect example of how our investments in product development make our customers more competitive in their markets,” said Paulo Cesar Silva, president and CEO of Embraer Commercial Aviation.

Embraer continues to invest in the E-Jets family, which is flown by some 60 airlines from 40 countries. The Company has begun implementing a series of enhancements to the current generation of E-Jets, including new wingtips, systems optimization and aerodynamic refinements that will lower fuel burn by up to 5%. Republic will be the first customer to receive E175 aircraft with these enhancements.

"This is a significant milestone in our company’s history. Establishing a large regional jet fleet has long been part of our business plan and this agreement is another example of how we are executing on that plan in a way that benefits our business and our customers. We will offer more flights at the right intervals throughout the day in key markets while providing more opportunities for customers to travel in the First Class cabin to key business markets," said Chuck Schubert, American’s vice president for network planning.

More than 150 E175s are currently in service with 12 carriers. Because the E175 has no over wing exits that can restrict seat placement, operators have more flexibility in configuring the aircraft cabin. The E175's 2,000 nm (3,706 km) range, short field performance and superior hot and high capability make the airplane ideal for the North American network.

Republic Airways was the first US carrier to fly Embraer E-Jets. It acquired E170s in 2004 and still operates those aircraft today on behalf of United Express. With this new order, the Republic Airways E-Jet fleet will be comprised of 72 E170s and 107 E175s for a total of 179 E-Jets, 226 if all options are exercised.

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