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Embraer CEO Sees U.S. Airlines Back for More Amid Orders

June 18 (Bloomberg) -- Embraer SA Chief Executive Officer Frederico Curado sees more purchases from U.S. carriers after the Brazilian planemaker garnered its biggest haul of regional-jet orders in five years amid demand for larger aircraft.

“These planes are needed, like, yesterday,” Curado said today in an interview at the Paris Air Show, saying that he sees “strong demand” for the 76-seat E-175 planes.

U.S. carriers are buying more of the E-175 jets while phasing out the fuel-inefficient 37- and 50-seaters. Embraer pocketed more than 365 firm orders and commitments for the so-called E2 versions of its E-Jets regional lineup, introduced yesterday at the Paris expo, the industry’s biggest trade event. SkyWest Inc. and International Lease Finance Corp. are among buyers for the new aircraft, which arrives later this decade.

This follow a series of orders Embraer booked this year for the current model. United Airlines partner SkyWest agreed to buy 40 E-175 jets after Embraer secured 30 sales to United in April. Republic Airways Holdings Inc., a partner of American Airlines, agreed to order 47 of the jets earlier this year.

Embraer rose 5.1 percent to 20.95 reais, the highest closing price since January 2008, in Sao Paulo. The shares have gained 45 percent this year.

Pilot Contracts

U.S. carriers paved the way for the E-175 deals by renegotiating pilot contracts to let lower-paying commuter partners fly larger planes. Embraer sees more orders for the current generation planes over the next couple of years due to these changes, Curado said.

The CEO’s optimism is undiminished after winning $709 million of orders from four airlines for the current versions. Conviasa will take seven E-190s, while Air Lituanica will receive four of the jets and Air Costa will order one, Curado said. Japan Airlines Co. bought four of the smaller E-170 variant, he said.

“My sales priority is the existing family,” Curado said.

The E-170 has a list price of $38.7 million and seats 70 to 78 people, according to the website of Sao Jose dos Campos, Brazil-based Embraer. The E-190 carries a $46.2 million list price and can hold as many as 114 passengers, Embraer has said. Airlines typically buy at a discount.

To contact the reporters on this story: Tim Catts in New York at tcatts1@bloomberg.net; Robert Wall in London at rwall6@bloomberg.net; Leslie Picker in New York at lpicker2@bloomberg.net

To contact the editors responsible for this story: Ed Dufner at edufner@bloomberg.net; Benedikt Kammel at bkammel@bloomberg.net

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