Air Canada to buy 45 Embraer aircraft

Embraer, Brazil’s megabuck aviation company, landed a contract for at least $1.35 billion to sell 45 190-model planes to Air Canada with an option for 45 additional aircraft later on. The news helped shoot up share prices for the Brazilian firm in the local stock market.

The announcement that Air Canada split up the purchase of aircraft for a new fleet between Embraer and Canada-based Bombardier Inc. –the Brazilian company’s top competitor in the market- made Embarer’s high-end stocks close with 5 percent gains in the Sao Paolo Stock Exchange.

Sources close to Embraer, the world’s fourth-largest maker of commercial airliners, confirmed the Brazilian company inked a contract with Air Canada for an initial sale of 45 aircraft with a provisioned option to sell 45 more planes.

The price tag of the entire package is $1.35 billion, a figure that could rise to $2.7 billion if the aforesaid provision is eventually implemented.

Once the purchase is completed, Air Canada will emerge as the world’s third air carrier ever to receive the Embraer 190 plane, a member of a recent breed of Brazilian-made airliners seating between 70 and 100 passengers each.

The family’s oldest member –the Embraer 170- is now wrapping up its certification and flight processes, and will be ready for takeoff as soon as early next year.

Bombardier Inc. also signed a $1.3-billion contract with Air Canada to sell 45 smaller planes intended to cover domestic routes in the North American nation. Like Embraer, Bombardier’s contract features a provisioned option for the sale of 45 additional jetliners to the Canadian carrier for up to $2.7 billion.

According to Embraer’s management, delivery of the new 190-model planes won’t start until 2005 and the final contract will be signed in the first quarter of 2005.