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By Chan Sue Ling - Bloomberg
Jan. 25 (Bloomberg) -- Empresa Brasileira de Aeronautica SA, the world's fourth-biggest aircraft maker, said it's in discussions with Japan Airlines Corp. for an order of as many as 10 regional jets.
The Sao Jose dos Campos, Brazil-based planemaker is proposing the Embraer 170 and 190, Bruce Peddle, managing director for the Asia Pacific market, said in an interview. Japan Airlines wants to add smaller planes to its fleet as it prepares to meet higher demand for regional air travel after Tokyo's Haneda airport completes its expansion.
``It's an order of up to about 10 aircraft,'' Peddle, who was attending a low-cost carrier conference in Singapore, said yesterday. Japan Airlines is ``studying the expansion of Haneda. They believe that there's a need there for regional jets.''
Winning the order, worth as much as $330 million at list prices, will help Embraer break into the Japanese market for smaller aircraft that's dominated by rival Bombardier Inc. An order from Asia's largest carrier by sales will boost Embraer's bid to increase the Asia-Pacific region's contribution to its total sales to 14 percent in 20 years from 8 percent currently.
``The number of aircraft and timing of introduction are not fixed, but we are thinking of introducing them in time for the expansion of slots,'' Stephen Pearlman, spokesman at Japan Airlines, said in an e-mailed reply to Bloomberg News queries late yesterday. ``There is no deadline for the decision and we have not indicated the possible numbers required.''
The Embraer 170, which can seat as many as 78 passengers and has a range of 2,000 nautical miles (3,702 kilometers), cost $27.5 million each at list prices. The 190 version, which cost $33 million each, can carry as many as 108 passengers and reach a maximum of 2,300 nautical miles.
Smaller Aircraft
Japan Airlines has said the regional jets would be operated by its J-Air domestic subsidiary, which already has 50-seat Bombardier CRJ200s in its fleet. The airline's fleet as of Sept. 30 comprised of 279 aircraft, including nine 50-seater CRJ200s and eight 70-seater DHC-8-Q400s made by Bombardier.
Montreal-based Bombardier plans to offer the Japanese carrier the CRJ700 and the 900 version, Trung Ngo, vice president for marketing and communications for regional aircraft, said in an interview last November.
Japan Airlines, the largest operator of Boeing Co.'s 747s, wants to introduce smaller, more fuel-efficient aircraft into its fleet. The carrier aims to reduce the number of different aircraft types it operates to eight by the end of 2010 from nine as at the end of 2005, its Web site said.
The airline has been cutting unprofitable routes and plans to reduce a total of 9,000 jobs after posting two losses in the last three financial years.
Japan Airlines, which lost passengers to All Nippon Airways Co. last year following safety mishaps, will cut as many as 3,000 jobs over the next three years, it said on Jan. 10. It had already said it would reduce its workforce by 6,000 people over a six-year period ending March 2008.
Shares of Japan Airlines fell 1.2 percent to close at 250 yen in Tokyo. The stock has risen 18 percent this year, making it the second-best performer among the nine-member Bloomberg Asia Pacific Airlines Index.
To contact the reporter on this story: Chan Sue Ling in Singapore slchan@bloomberg.net
Last Updated: January 25, 2007 01:39 EST
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