News & Analysis » US

Republic Airways Signs LOI To Buy 24 New Embraer 190 Aircraft - Update

(RTTNews) - Republic Airways Holdings Inc. (RJET) said Wednesday that it has signed a letter of intent with Embraer - Empresa Brasileira de Aeron??utica S.A. (ERJ) to acquire 24 new Embraer 190 regional jets, with the option to convert any of the deliveries to the larger Embraer 195 model. The letter of intent or LOI is subject to final documentation, including final commercial terms.

Indiana, Indianapolis-based Republic Airways said that under the deal with Brazil-based Embraer, deliveries of the aircraft would begin in mid 2011, with the first six aircraft arriving by the end of the year. The company noted that the deal will help it in the re-optimization of its fleet by replacing smaller regional jets with the larger and more economical aircraft.

The aircraft would be configured in a single-class arrangement and include stretch seating, a key on-board amenity offered in Republic's branded operation, the term Republic uses for its Frontier and Midwest carriers. The Embraer 190 would offer 99 seats, while the E195 would be configured with 116 if Republic chose to convert any of the orders.

The Embraer 190 is the third of the four members of the Embraer 170/190 family of E-Jets, a brand-new commercial aircraft that entered service in August 2005. The jet may be configured in one or two classes, seating 98 to 114 passengers in a comfortable four-abreast, no-middle-seat configuration, and can fly nonstop for up to 2,400 nautical miles. The E-Jet family of commercial aircraft includes the E-170, E-175, E-190 and E-195 variations. The primary features of these aircraft are their narrow body design and twin engines.

Bryan Bedford, chairman, president and CEO of Republic Airways said, "We are delighted to be able to increase our fleet of E190 aircraft and possibly add the E195 to our fleet. Republic has enjoyed a strong and successful, 12-year partnership with Embraer and this letter of intent is a further reflection of that partnership. The E190 is a consistent passenger favorite due to its significant personal space and amenities and offers us unique mission capability from Denver, Milwaukee and Kansas City."

In late February, Republic signed a firm purchase agreement with Canada-based Bombardier Inc.'s (BBD-A.TO, BBD-B.TO) to buy Bombardier's 40 CS300 jetliners and in the process, becamethe first North American airline to place a firm order for Bombardier's CSeries jetliners. Based on the list price, the contract is valued at approximately US$3.06 billion. the agreement includes options for an additional 40 CS300 aircraft. If all options are exercised, the contract value could rise to about US$6.34 billion.

Republic Airways Holdings is an airline holding company that owns Chautauqua Airlines, Frontier Airlines, Lynx Aviation, Midwest Airlines, Republic Airlines and Shuttle America.

RJET closed Wednesday's regular trading session at $5.60, down $0.15 or 2.61% on a volume of 0.47 million shares.