Air Canada buying 90 jets from Bombardier, Embraer
Air Canada is evenly dividing an order for 90 aircraft between Canada's Bombardier (TSX:BBD.b)and its Brazilian rival, Embraer.
Air Canada said Friday it will buy 15 50-seat jets and 30 74-seat planes from Bombardier for $1.8 billion. The airline will also buy 45 93-seat jets from Embraer for $1.35 billion US.
A decision on another 15 aircraft will be made following more negotiations, Air Canada said.
The order include options for 45 additional planes from each manufacturer.
Both purchases are conditional on Air Canada securing financing and approval by Trinity Time Investments and the Ontario court in charge of Air Canada's restructuring under bankruptcy protection from its creditors.
"The small jet aircraft are fundamental to our emergence as a stronger, more cost-effective airline. For this reason we are moving forward with this order now," Air Canada CEO Robert Milton said.
Not everyone was sold on the merits of the aircraft purchase. The Air Canada Pilots questioned why Air Canada wants to buy two types of aircraft with a similar range and characteristics.
"Adding a whole new type into the fleet adds complexity to the operation, and triggers additional start-up, training and infrastructure costs," Captain Don Johnson, president of ACPA, said.
The pilots said they are surprised the order did not go to Airbus' A318, which seats up to 129 passengers. The pilots said that jet is closer to other Airbus aircraft already in Air Canada's fleet.
Bombardier and Embraer fought a decade-long trade dispute over subsidies. Each company argued the other benefitted from illegal government subsidies. The World Trade Organization ultimately ruled both trade practices were wrong.