Alaska Air Group Inc. has selected Embraer SA to provide as many as 60 regional jets to serve the airline’s ambition of serving smaller markets farther from its Pacific Northwest base, according to two people familiar with the planned deal.
The proposed firm order for 30 E175 aircraft and 30 additional options is valued at more than $2.6 billion at list prices, though airlines typically receive steep discounts. The aircraft would be operated by its regional subsidiary Horizon Air.
While the contract isn’t finalized, the Seattle-based airline has selected the Brazilian aircraft manufacturer and now enters into exclusive negotiations. The decision comes ahead of the company’s board of directors meeting on Wednesday, the people said.
An Alaska Air spokeswoman said the airline remains “in the midst of a competitive process to evaluate, and hopefully select, a 76-seat regional jet to add to Horizon’s fleet. No final decision has been made, no documents have been signed and our board of directors has not approved any new jet purchase. If and when a definitive agreement has been signed, we will release a statement.”
The selection of Embraer is a significant blow to Bombardier Inc., which offered its CRJ900 jets to Alaska. The selection gives its rival a major foothold for growth at its once-stalwart customer. Large regional jets, like those offered by Embraer and Bombardier, are less costly to fly on flights longer than 400 miles, according to Alaska Air’s Chief Financial Officer Brandon Pedersen.
Regional carrier SkyWest Inc. last year began flying new E175 jets for Alaska on a contract basis, serving routes such as Seattle to Milwaukee and Oklahoma City and Portland, Ore., to St. Louis.
Alaska uses Bombardier Q400 turboprop aircraft for its regional operations under its Horizon Air subsidiary. The loss of the regional-jet deal could cut a crucial future source of cash flow for Bombardier, which has struggled with its delayed and over-budget new CSeries jetliner and ultralong range Global 7000 business jet.
Spokeswomen from Bombardier and Embraer declined to comment on the regional jet deal.
As a longtime customer, however, the Bombardier spokeswoman said, the Canadian plane maker is “in discussion with them on a number of items and is in constant communication.”
The Wall Street Journal
Alaska Airlines getting closer to signing an order with Embraer
