Embraer renegotiates sale of 57 aircraft to US Airways

13 February 2006

Sao Paulo, Brazil, 13 Feb – Brazilian aircraft manufacturer Embraer said Friday it had renegotiated a deal to sell 57 airplanes to US Airways, which had been suspended in 2004 when the US airline filed for bankruptcy.

The value of the new contract was not officially announced, but Brazilian market sources estimate that it will total some US$1.88 billion.

In the original agreement, signed in 2003, US Airways had ordered 85 Embraer 170 aircraft, with a capacity of between 70 and 78 passengers, and 28 units had already been delivered.

In September 2004, when US Airways field for bankruptcy in the US in order to continue operating while it negotiated its restructuring, its contract with the Brazilian manufacturer was suspended.

The agreement now announced includes the condition that the 57 aircraft that have yet to be delivered will be converted to 25 definite orders for Embraer 190 models, with a capacity of up to 100 passengers and 32 definite orders for the same model, with the latter subject to confirmation by the airline.

Each Embraer 190 costs around US$33 million, while the 170 model costs some US$27.5 million.

Deliveries to US Airways will begin again in November 2006, following approval from US bankruptcy courts, Embraer said in a statement.

Embrarer has a joint venture with China’s Harbin Aircraft Industry Group Co and Hafei Aviation Industry Co to build small and medium-sized planes.(macauhub)

MACAUHUB FRENCH