Bombardier pushes CRJ savings for Delta

Washington DC
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Bombardier executives say that their CRJ regional jet offers significant operating cost savings over their competitor's aircraft, as they compete with Embraer for a Delta Air Lines order.

Pierre Beaudoin, president and chief executive of Bombardier, says that the CRJ offers between 6% to 16% better operating costs than their competitor, during an earnings call today.

"We think we have a good chance with Delta," he says.

Atlanta-based Delta says that it is in discussions with both the Canadian and Brazilian airframers regarding an order for a 76-seat jet - either the CRJ900 or E-175 - and anticipates a decision by the end of the year. The deal is part of the restructuring of its regional fleet, which includes removing more than 200 50-seat jets and adding 88 110-seat Boeing 717-200s to its mainline operation.

Embraer is offering Delta a "Plus" version of its E-175 jet that improves fuel efficiency by 5% compared to the baseline aircraft, according to Cai Von Rumohr, aerospace analyst for Cowen and Co earlier this year.

"We expect some new orders, potentially as early as this year from Delta, but the majority are likely next year," says Walter Spracklin, a transportation equity analyst at RBC Capital Markets, on new orders for the CRJ.

American Airlines, United Airlines and US Airways have all said that they would like to replace some 50-seat regional jets with larger aircraft in their feeder fleets. However, pilot scope clauses restrict the number of large regional jets that they can fly.

American and United are in negotiations with their pilots regarding new contracts that, if approved, are expected to allow for the additional large regional jets.