Rewritten pilot contracts are allowing airlines to have bigger, more-efficient regional planes flown by commuter partners with lower labor costs, said Benjamin Boehm, vice president for business development and strategy at Bombardier.
American, US Airways Group Inc. (LCC) and SkyWest Inc. (SKYW) may together purchase as many as 500 regional jets this year, according to an RBC Capital Markets forecast. Bombardier, winner of a contract for 40 planes from Delta Air Lines Inc. (DAL) last month, is jockeying for new sales with Brazil’s Embraer SA (EMBR3) and Japan’s Mitsubishi Aircraft Corp.
“Right now the U.S. market is quickly growing into a very fertile hunting ground,” Boehm said last week in a telephone interview.
U.S. carriers have taken delivery of more than 1,000 Bombardier regional jets since 1992, when the company’s 50-seat CRJ200, the first model in its CRJ series, entered service. That represents more than 60 percent of the Montreal-based company’s global shipments of CRJs.
American, which is weighing a merger with US Airways while reorganizing in bankruptcy, may order 200 to 300 regional jets this year, Walter Spracklin, an analyst at RBC Capital Markets in Toronto, said yesterday. US Airways may buy 60 to 100 planes, while SkyWest may order 100, he said.
“This is the next wave of major fleet renewals for U.S. regionals,” Chris Murray, an analyst at PI Financial Corp. in Toronto, said yesterday in a telephone interview. “There may be fewer aircraft but they will be larger aircraft.”
The U.S. market “is the heart, the homeland, the birthplace of regional aviation, the birthplace of hub-and-spoke aviation and will continue to be,” Boehm said.
American declined to comment, said Michael Trevino, a spokesman for the Fort Worth, Texas-based carrier. US Airways is “currently evaluating our US Express fleet needs for the future,” said Todd Lehmacher, a spokesman for the Tempe, Arizona-based airline. He declined to comment further.
SkyWest, the world’s largest operator of CRJs, said in July it was looking to replace most of its fleet -- which now includes 710 planes -- over the next 10 to 12 years as leases end and aircraft are returned to lessors. SkyWest last month entered into an agreement to buy as many as 100 planes from Mitsubishi Aircraft that includes an option for 100 more.
Atlanta-based Delta agreed last month to buy jets from Bombardier under a new pilot contract that lets the company add as many as 70 of the 76-seat CRJ900 planes as it retires older, cramped 50-seat CRJ200 aircraft.
Pilot familiarity with the CRJ jets, which can seat 50 to 100 people, may help Bombardier, Boehm said.
“We have longstanding customers like Delta who can take a pilot who has flown a CRJ200 and with little training, put him on a CRJ700, a CRJ900 and a CRJ1000 and fly it,” he said. “We are watching these airlines, most of which already have our product, being allowed to fly bigger airplanes. That’s perfect for the CRJ family.”
A merger between American and US Airways wouldn’t affect the combined airline’s appetite for new aircraft, Boehm said.
“We definitely see it as an opportunity for triggering new orders,” he said about the possible combination. “Delta’s order was the product of a previous merger between Delta and Northwest. We see these events as opportunities.”
Bombardier also has hopes for an order from SkyWest, even after the carrier decided to buy Mitsubishi planes. Deliveries of the Mitsubishi regional jet, which is still in development, will start in 2017.
SkyWest operates regional flights for carriers that include United Continental Holdings Inc. (UAL) and Delta. SkyWest Airlines and ExpressJet Airlines, the company’s two units, have a combined fleet that now includes 277 Embraer jets and 433 Bombardier planes, according to the company’s website. Together, SkyWest and ExpressJet fly 256 of Bombardier’s CRJ200s.
“We still believe there are opportunities for us, even at SkyWest,” Boehm said. “Mitsubishi has the potential to be something important. At the same time, they are not flying yet. They’ve never developed an airplane before. We have a long history at Bombardier, and we’re going to continue to emphasize that.”
Bombardier’s Class B stock rose 0.5 percent to C$4.04 at the close in Toronto. The shares fell 7.4 percent last year.
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