US Airways Adjusts Plane Deal With Embraer

US Airways Group Inc. will buy larger planes than originally planned from Brazilian manufacturer Embraer, the two companies announced Friday.

The American airline is now expected to receive 25 Embraer 190 jets starting in November instead of 57 smaller model 170 jets, Embraer said in a statement. An order for another 32 model 190 aircraft is subject to confirmation by the airline.

The original contract was worth $2.1 billion based on the planes' list price, although airlines usually get large discounts.

The adjustment potentially could bring in another $228 million for the Brazilian aircraft manufacturer, according to Alexandre Garcia, analyst at the Agora Senior brokerage in Rio de Janeiro.

"The news of the sale is undoubtedly positive for Embraer. ... The deal had been anticipated for some time and it finally came," said Elaine de la Rocque, of BES Securities in Rio de Janeiro.

US Airways also added an option to purchase an additional 50 aircraft in the model 170/190 family, Embraer said.

The Embraer model 190 jets, with their capacity of around 100 seats, are seen as an economical alternative to Boeing Co. and Airbus SA planes on short haul flights. With the deal, three airlines - US Airways Group Inc., ACE Aviation Holdings Inc.'s Air Canada and JetBlue Airways Corp. - will be operating the 190 jets by the end of 2006.

The US Airways aircraft will have a 99-seat configuration, with 11 first-class and 88 economy-class seats. They will be powered by GE CF34-10E engines.

US Airways sold its model 170 fleet to Republic Airways Holding, Inc., as part of US Airways' debt reorganization, which culminated with a merger with America West Airlines last fall.

Embraer, the world's fourth-largest aircraft manufacturer, has said on numerous occasions that it does not intend to compete with Boeing and Airbus in the market for larger jets.


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