Brazil's Embraer And BRA Sign Airplane Deal

Under agreement, BRA would be first Brazilian carrier to order a large fleet of domestically-built jets.

SAO PAULO, Brazil (AP) — Brazilian aircraft manufacturer Embraer SA signed a deal Wednesday to sell 20 of its new E-195 large regional jets to local airline BRA Transportes Aereas.
 
The deal, announced in June, includes options for BRA to buy 20 more E-195s, making it the first Brazilian carrier to order a large fleet of domestically built jets. If all these options are taken, the accord also allows for 20 more options and 15 more rights to buy, which do not reserve a space in the production line, Embraer said in a news release.
 
President Luiz Inacio da Silva attended the signing ceremony, saying the deal could ''mark a change in Brazilian aviation''. He claimed the deal consolidates Embraer as the world's third-largest aircraft producer and the largest producer of airplanes of less than 120 seats.
 
In 2001, former flagship Varig had a fleet of 15 50-seater Embraer ERJ-145 planes but no other local airlines use Embraer planes.
 
The delivery of the first plane is expected in February or March in a deal that could be worth US $2.7 billion (euro2 billion).
 
BRA chief executive Humberto Folegatti said the airline hopes to buy up to 100 planes in the next five years while developing routes between mid-sized cities.
 
The number of Brazilian cities served by domestic flights dropped by 30 percent between 1997 and 2005, and BRA wants to reverse that trend.
 
Air authorities are currently re-mapping air routes to reduce flights in and out of Congonhas — Brazil's busiest domestic airport in Sao Paulo after a deadly air crash last month.
 
Follegatti said despite the crash, Brazil remains a vastly under-penetrated market and demand should continue to grow at current levels of around 14 percent.
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