United Continental Holdings Inc. (UAL) said Monday it placed an
order with Brazil's Embraer SA (ERJ, EMBR3.BR) for 30 large
regional jetliners, 76-seat aircraft that United will own but lease
to a regional affiliate that will operate them.
United said the new planes, Embraer-175s, will be delivered in
2014 and 2015. It didn't disclose a price for the order, but at
list price the order could be worth about $1.26 billion. The planes
will be flown by a United Express partner to be named later, the
company said.
United, the world's largest airline by traffic, counts about 550
turboprops and regional jets operating on its behalf by several
regional carrier affiliates. United has never owned its regional
jets but its merger partner Continental has had experience in
owning smaller planes and leasing them to its commuter
partners.
Now that the pilots of United and Continental have agreed to a
new joint contract, that labor agreement gives their employer more
flexibility to add larger regional jets to the fleets of its
commuter affiliates. In their old labor agreement, Continental
pilots severely limited the number of planes that could be flown by
commuter airlines, and especially the larger, more
passenger-pleasing versions, on Continental's behalf.
The new planes will be outfitted with first-class cabins seating
12, a roomier section in the front of coach known as Economy Plus
with 16 seats, and 48 economy seats. United Continental's regional
partners currently operate 38 70-seat Embraer 170s and 115 CRJ700s,
a rival aircraft of the same size made by Canada's Bombardier Inc.
(BDRBF, BBD.A.T, BBD.B.T). The Embraer 175 is slightly larger.
The new planes will replace some of the 350 smaller, less
efficient 50-seat regional jets now being flown on United
Continental's behalf, the company said.
Embraer, in a statement Monday, said United also took options on
40 additional E-175s. If all the options are exercised, the
combined order has an estimated value of $2.9 billion at current
list prices, the manufacturer said.
Write to Susan Carey at susan.carey@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires