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American Airlines Group Inc. split a $1.4 billion order of regional jets between Bombardier Inc. and Embraer SA, extending a push to update its short-range fleet.
The world’s largest carrier is buying 15 Bombardier CRJ900 planes and 15 Embraer E-175 jets, according to a regulatory filing Thursday. American also took options for 15 more aircraft from each manufacturer.
The purchase boosts American’s shift to bigger regional jets with room for two passenger classes, which better match the offerings of the airline’s larger single-aisle planes. American has also reduced the number of aircraft in the fleet that are smaller than the new ones it’s buying from Bombardier and Embraer.
The CRJ900 planes will be operated by regional affiliate PSA Airlines with the Embraer E-175 jets going to Envoy Air, American said. Deliveries of both aircraft types will begin next year.
American has added about 200 dual-class regional jets over the past four years. At the end of last year, the Fort Worth, Texas-based carrier had 118 of Bombardier’s CRJ900 aircraft operated by regional affiliates PSA and Mesa airlines. It had 148 of Embraer’s E-175 planes in operation at Republic, Envoy and Compass.
Bombardier and Sao Jose dos Campos, Brazil-based Embraer are pushing replacements for the aging regional jets in U.S. fleets. According to a market forecast released last year by Montreal-based Bombardier, North American airlines will need to retire about 2,100 aircraft of 150 seats or fewer by 2036. Forty percent of the current fleet is at least 15 years old, Bombardier said.
The CRJ900 order has a list value of about $719 million before customary discounts, Bombardier said in a statement. The E-175 deal is valued at about $705 million based on list prices, Embraer said.
–With assistance from Frederic Tomesco .
©2018 Bloomberg L.P.
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